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Small Businesses

Volume 410: debated on Friday 19 September 2003

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:To a sk the Secretary of State for Trade and Industry what the start up rate was for small businesses in (a) the Jarrow constituency, (b) South Tyneside, (c) Tyne and Wear, (d) the North East and (e) the UK in each year since 1997. [130735]

:Business start-ups are measured officially by VAT registrations. The latest year for which VAT registration data are available is 2001. Data are not available for parliamentary constituencies.The VAT registrations threshold has risen during this period from £48,000 to £54,000. There is no accurate estimate of the number of companies that would be added to this total if the £48,000 threshold had not risen by more than the rates of inflation.

:To ask the Secretary of State for Trade and Industry what support the Government offers to new small businesses in the North East. [130736]

:Government support for new businesses comes in a variety of forms. The Business Link Operators (BLOs) put together programmes for start-up businesses, working with Enterprise Agencies and other partners, which are funded from a variety of sources, including:SBS core funding, residual SR B monies, RDA "single programme" funds, and European funds. In total, in the North East, the BLOs are spending around £3.6 million on start-up programmes (such as BL Tees Valley's "Start Right in Business" programme), and are contributing around £1.7 million to supporting incubation projects.Support programmes vary in content between subregions, but essentially offer a programme of advice and assistance in key areas where new businesses require help, eg producing business plans to help access finance; developing marketing programmes, managing finance and cash flow, etc. They may be able to offer subsidies directly, or secure funding through other partners.Help for start-up businesses does not end with the start-up programmes. LSC-funded workforce development, DTI-funded TPUK activities, and DTI's new products such as the R&D) grant are part of the wider range of services available via BLOs which may be appropriate for young businesses.Access to Finance initiatives, such as the SBS-funded Regional Venture Capital fund (Capital North East) and Investor Readiness programmes (operated by Northern Enterprise and Entrust respectively), and the BL Tyne and Wear-operated regional Micro Loan fund can also benefit businesses in the early stage of operation, and lead to a more mature approach to business finance being inculcated into new businesses in a region where a grant culture has persisted. This is essential for the future growth prospects of businesses.Start-up programmes in the North East are becoming better co-ordinated, with closer working between BLOs, Enterprise Agencies and other partners. Examples include the new start-up consortium in Tyne and Wear, closer working relationships in County Durham, and the "Start Right In Business" programme in Tees Valley. The on-going RDA-led review of business support process will develop these co-operative approaches further.An RDA-led initiative "Strategy for Success" should lead, through the creation of centres of excellence and an DPR exploitation company, to the spin out of more businesses through the HEI sector.At national level, SBS is co-ordinating the development of a cross-Government national strategy for start up businesses. This will Draw on the experience and research from partners around the country to create a consistent, evidence-based start-up proposition, to which local variations may be added. It will also develop a co-ordinated between DWP, DFES and other Government Departments which will result in easier access and interface with entrepreneurs. An early result of such co-operation is the "No-nonsense Guide" to Government rules and regulations for setting up your business. This has been well received by start-up companies and by business support intermediaries.

:To ask the Secretary of State for Trade and Industry what action the Government is taking to encourage entrepreneurs to set up their own businesses in the North East. [130737]

:The information is as follows:

Enterprise Centres in six FE colleges in Tyne and Wear.
Sponsoring "Start a Business a day" initiative by the Chronicle Newspaper Co-operative working with People into Enterprise and Women into the Network to run events helping budding entrepreneurs turn hobbies into businesses.
Specialised programmes in decentralised advice centres in rural Northumberland, including motivational workshops and demystification sessions.
A three-day rural enterprise event.
Initiatives to encourage social enterprise such as "School for Social Entrepreneurs" and "Regen School" in Tyne and Wear and the work of the Community Enterprise team at BL County Durham. Co-operation being developed through NESEP (North East Social Enterprise Partnership) "Women get into Enterprise" programme, one of a number of initiatives to encourage enterprise in under-represented groups.
Linking in with incubation projects to provide co-ordinated start-up support and advice.
The RDA, ONE North East, has embarked on an ambitious programme to encourage more start up businesses by encouraging would-be entrepreneurs to take the plunge and start their businesses with the help of support programmes and agencies in the region, and in which the BLOs provide a key delivery role. This is using the flexibility of single programme funding to prioritise the entrepreneurship agenda in the NE to raise the relative start-up rate and encourage entrepreneurs to stay in the North East. Initiatives include:

A major event last April, organised by BL Tyne and Wear and funded by the RDA and SBS, in which the regions' BLOs and Enterprise Agencies ran Start up shows in Tyne and Wear and Teesside and which would-be entrepreneurs could speak directly with advisers, other entrepreneurs, etc.
This was followed by several local outreach events earlier this year supported by a regional enterprise PR campaign.
The "Enterprise Island" programme in which progress of 10 would-be entrepreneurs was charted in a film.
Initiatives are also being developed to boost graduate enterprise (building on programmes the universities have developed through HEFCE funding), and to further promote enterprise in schools building on "Enterprise Insight", Young Enterprise, and other programmes.

At national level, SBS is co-ordinating the development of a cross-Government strategy to encourage an enterprise culture. Emerging ideas for this will be closer co-operation with Job Centres and the benefits system (including ideas pioneered by Inbiz, a Teesside company), and with careers services to encourage self-employment and business start up as a career choice. The strategy is also expected to develop ideas for reducing risk to individuals contemplating business start-up.