THE Government's proposed blanket broadband speed targets for 2012 show the UK is "in a time warp", the Federation of Small Businesses has said.

The FSB has added its voice to calls from the Westcountry that the Government's Digital Britain scheme to enable universal access to broadband speeds of at least two megabits per second by 2012, will not go far enough to support businesses operating from rural areas.

David Shephard, the Federation's Devon policy chairman said: "Research by the FSB shows that a third of small businesses already have 2mbps broadband speed, yet struggle to do core, day-to-day business activities.

"More than half of small businesses rely on the internet for up to 50 per cent of their annual turnover, yet simple tasks such as emailing, marketing, buying and selling, are time-consuming because their broadband speeds are letting them down."

He added: "Around 60 per cent of small businesses want a minimum broadband speed of 8mbps and the FSB urges the Government to do more."

While Cornwall will benefit from a broadband upgrade through its European Convergence millions, there's no such pot available to helps firms in remote parts of Devon secure the higher speeds needed in modern-day business life.

While some larger firms will fund their own fibre-optic cables to achieve the higher speeds, the fear is that small rural firms will be left to the mercy of demand-led market forces.

Steve Tomkinson, director of Plymouth digital marketing agency Numo Group, said: "Five years ago, an expectation of two megs would have been fantastic. Now, we have two 25mbps lines in our office and we just couldn't operate on a 2mbps line.

"Here in the city, we are feet away from the nearest telephone exchange that guarantees our speeds, but for those out in the sticks, there are going to major problems in linking up to the infrastructure."

He added: "Most computer applications now being developed for businesses are delivered online, with documents and office management files that are huge. To operate on that level, you need a really good connection.

"The target speeds just don't come up to it, especially for those sharing a connection in a small office. You need to greatly overestimate, in order to future-proof. 8mbps would be more realistic."

The Government has announced plans for a £6 a year "telephone tax," plus excess funds from the switchover to digital TV, to help subsidise the extension of fibre optic networks to replace copper telephone wires that are vital to achieve Next Generation broadband speeds.

But this week the Commission for Rural Communities said that there will be a massive shortfall in the funding accrued, to ensure all-areas access to the 21st Century Network.

Chris Garcia, the South West RDA's head of clusters said: "The fact that the Government is recognising that broadband is universally required is a significant step forward. We are keen to work with Devon County Council with respect to rural areas. I believe that over time a range of technology will become available to serve these areas and my guess is that it may not be a consistent solution."

Mr Garcia added that SWRDA would participate in talks "over the next 12 months" to negotiate what is likely to be a very small handout from the "Barrosa Broadband Billions," an EU cash pot allocated to subsidise rural broadband services across Europe's remotest areas.