East Lancashire business experts warned that small firms could be hit hard by the Budget.

The budget will see small firms paying more tax.

This is because corporation tax for small businesses - a tax paid by limited companies on their profits - is to be increased from 20p to 22p in the pound by 2009, while the mainstream tax, which would affect larger businesses, actually goes down from 30p to 28p by 2008.

East Lancashire business experts have said this could hit the area because it is short of new businesses, which will fall into this tax bracket, and the budget will not help.

Anne Wilson, of Pierce chartered accountants, Blackburn, said: "Some businesses are going to be better off and some could be worse off. I think the small ones could find that they're worse off because of the rise to 22p of the corporation tax rate."

Brian Hickman, managing director of Thwaites, said: "We are pretty disappointed with the outcome because for a long time on the lead up to the budget, the industry has been lobbying Government saying that the taxation system is extremely unfair on beer in particular in relation to other alcoholic drinks, principally cider and wine.

"Beer is the national drink and brewing is one of the few traditional manufacturing industries in this country."

David Grant, managing director of Moorhouse's Brewery, Burnley, said: "With their being a duty increase our prices will have to reflect that next Monday morning.

"It's tax and therefore as much as I might like to take the weight of that the business really can't afford it."