His comments come as the Forum of Private Business (FPB) released its new year statement in which it claimed reduced public spending, increased costs and late payments will impact SMEs in the forthcoming year.

Phil Orford, chief executive of the FPB, said the government needs to "cut red tape" in the workplace to enable smaller companies to take on jobs lost in public sector cuts and added that simplifying the tax system would help a greater number of companies to expand.

He said: "Removing the barriers to growth created by tax and red tape must be a cornerstone of emerging enterprise policies. We are pushing for the UK’s complex tax system to be simplified and complying with regulation to be made more proportionate for small firms.

"Employment law, in particular, must cease to be a barrier to job creation and should be rebalanced more in favour of employers – and the majority of the workforce – not just individual employees."

Brown added that while 2010 was a difficult year for many, 2011 should be a time where SMEs look to grow and adapt their businesses.

He said: "Factors such as the VAT increase and a cut in public spending will undoubtedly have an effect on print spend going forward but there are positive signs.

"The forecast, especially for the second half of the year is looking more positive than before and I think the threat of a double-dip recession is starting to ease."