AGAINST a background of positive economic news, we’ve recently heard less upbeat comments from the Prime Minster and the Chancellor about the recovery, with talk of more spending cuts. Why?

The overriding reason is, of course, that the UK’s public finances remain fragile: inevitable after a deep recession, such as the one the UK (and indeed much of Europe) has just experienced.

We’ve still got some way to go in reducing our massive debt. Unfortunately, this gives the wrong message out to small businesses, for whom such news may represent a barrier to growth – especially coming, as it does, hot on the heels of years of continuing cutbacks.

The Prime Minster has already hinted that the need to make savings in public spending could bring a heftier tax burden for households.

Business taxation needs to be a part of that debate too. Giving businesses, especially small and medium sized enterprises, a break will only stimulate the economy further.

We have had positive news regarding our manufacturing output and the number of people in work.

Surveys show all-round confidence in the business world, with many companies in Dorset wanting to take on more staff and start building for their future. Investment intentions are on the up.

The British Chamber of Commerce forecast that GDP would outstretch its predicted performance in the first quarter of this year.

The Chamber’s expectation is for a 2.8 per cent result, compared with a forecast of 2.7 per cent. That still falls short of the Bank of England’s growth forecast of 3.4 per cent.

The Chamber did warn that the buoyant outlook brought its own long-term challenges. We continue to urge the Chancellor to use this month’s budget announcement to incentivise businesses to start hiring more young people. The youth unemployment rate is predicted to remain almost three times the national average until 2016.

I believe small businesses in Dorset can do more to help get long-term unemployed youngsters back to work.

As the economy continues to improve, we must work hard to avoid creating a lost generation of young people and a skills gap within our region.

We also need to boost wages for the lower paid.

I, for one, am hoping the Chancellor uses his budget statement on Wednesday to lay out the ways in which he will assist businesses wanting to take on more young people. We need incentives and tax breaks for companies prepared to support training programmes for their teams.

It would be an investment for all our futures. Here’s hoping.