The Chancellor, Gordon Brown, has pledged to repeal a raft of business regulations as part of an effort to foster an enterprise culture.
Manufacturing is on the mend, say the Chancellor
In his pre-Budget statement to Parliament, Mr Brown said he had identified 147 regulations which would be abolished or reformed.
The move addresses concerns over red tape, which business groups claim imposes hefty costs on companies.
Separately, the chancellor announced a new start-up fund for small businesses.
Dubbed the Enterprise Capital Funds, the new programme - based on a US model - will be up and running by the spring of 2004.
Mr Brown said he would look at ways of widening existing tax breaks on research spending by businesses, and would enhance tax relief on North Sea oil exploration.
He also announced moves to make it easier for small and medium-sized businesses to claim tax relief on investment in new facilities and machinery.
He said the changes would deliver a £400m boost to small firms over the next three years.
UK plc 'going strong'
Elsewhere, the chancellor said he had appointed Alan Wood, chief executive of Siemens UK, to recommend ways of helping British companies win government contracts in continental Europe.
Mr Brown said the pre-Budget measures were aimed at building on the UK's "historic strength...as one of the world's most enterprising economies."
The chancellor also delivered an upbeat assessment of British companies' health.
He said he expected business investment to grow by 0.75% in 2003, rising to 3-3.5% next year.
He added that the manufacturing sector, hit hard over the past three years by the strong pound, is set to expand by 0.75% this year, and by 2% in 2004.
Business groups welcomed the chancellor's statement, but said they were worried that tighter public finances may force him to raise taxes later on.
"This was a positive pre-Budget report for business, but we remain concerned about the outlook for the public finances," said Digby Jones, director general of the Confederation of British Industry.
Mr Jones said businesses would be "delighted" at Mr Brown's plan to improve funding for small firms, and also hailed his effort to encourage research spending.
Martin Temple, head of the Engineering Employers' Federation, said the measures would help manufacturers.
"However, our worry is that if he fails to bring public spending and borrowing under control, the sting in the tail for manufacturers may be higher taxes," he added.
Shadow Chancellor Oliver Letwin said repealing 147 regulations would not compensate for a big increase in business red tape since the Labour party came to power in 1997.
"At his present rate, it would take (the chancellor) ten days to add that many regulations to the burden on business," he said.
And Richard Collier-Keywood, head of tax at business services giant PriceWaterhouseCoopers said that while repealing the regulations would help, the move amounted to litte more than "tinkering."
"What is really needed is a zero-based approach to business regulation," he said.