Skip to main content

Enterprise Allowance

Volume 521: debated on Monday 10 January 2011

I am pleased to say that last week we announced that the new enterprise allowance would expand to become a nationwide scheme from next autumn. It will first be launched in Merseyside in about three weeks’ time, and it will be rolled out across those parts of the country that have a particular unemployment challenge from spring onwards.

I welcome the fact that the enterprise allowance scheme, which had such a positive effect in the 1980s, is being reinstated. However, I have a concern about the eligibility criteria: one has to have been unemployed for six months or more to be eligible. The National Audit Office noted in the 1980s that the longer someone spent on unemployment benefit before going into self-employment, the less successful that tended to be. Given that, will the Minister consider reducing that time and allowing people who have been unemployed for less than six months to go on to the scheme?

I would very much like to improve the support that we provide, but obviously we have to do that in the context of the finances that we have inherited from the Opposition. The big difference that the new scheme will make is that it will also take advantage of the expertise of existing business people. I hope that my hon. Friend, who has a strong track record in business, will look to become a mentor for one of the new business people. That is an important difference from the previous scheme; the new scheme offers both financial and practical support, and not just financial support.

Enterprise allowance will work all the better if young people are educated into the idea of creating their own businesses, yet thousands of people from Rotherham and other parts of south Yorkshire who go into work experience via the education business partnership scheme do not know whether the scheme will be continued. It is funded by the Department for Education, but we do not know whether it will be cut or continued. Could the Minister’s Department talk to the Department for Education and get a bit of joined-up government on this?

One of the things that we are doing is introducing changes to the guidelines to ensure that young people who find themselves unemployed have a much greater opportunity to get work experience in enterprises while they are on benefits. We have also announced tens of thousands of extra apprenticeships to give young people the chance to get involved in, and understand, business. Young people will be among those who are eligible to take advantage of the new enterprise allowance, if they are unfortunate enough to find themselves unemployed.