THE Federation of Small Businesses in the North-west has expressed its disappointment with the Chancellor's failure to extend tax breaks enjoyed by small limited companies to sole traders.

Mr Paul Henly, the FSB's North-west policy officer, hoped for good news on this point in Mr Brown's 2002 pre budget report, but there was no mention.

He said: "We now predict that sole traders and partnerships will be driven into incorporation and we shall be campaigning on this issue immediately." But he continued: "We do, however, welcome the improvements to the Small Firms Loan Guarantee Scheme to take in retailers and motor mechanics among other small businesses".

"Although it was not a very exciting report, we do welcome the support awarded for single persons and childless couples that will particularly help self-employed people on low earnings through the new employment credits".

The FSB -- which represents 17,000 members in Lancashire, Cheshire, Cumbria, Merseyside and Manchester -- welcomed other measures announced for small businesses including:

Giving small businesses more access to public procurement contracts.

A review of Employer's Liability Insurance legislation, although more

urgent action is needed

Devolving central DTI support for small businesses to the regions

More money for schools to encourage the ethos of enterprise.