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Business Start-ups (Government Support)

Volume 557: debated on Monday 28 January 2013

We believe that for many people self-employment is the best route out of unemployment. That is why we have introduced the new enterprise allowance and enterprise clubs, which have proved effective in helping people back into work.

Tourism is obviously a key industry in Bournemouth, but the digital economy is now the fastest-growing sector thanks to the work of Bournemouth university—so much so that Bournemouth, Christchurch and Poole are now getting the nickname of the silicon beach of England. What more can be done to harness that interest and expertise through incubator units and start-ups?

My hon. Friend makes an important point. We should be capitalising on the skills of graduates of Bournemouth university to ensure that the digital economy spreads throughout the UK, including to silicon beach. I urge him to talk to his local council and to others to see what opportunities there are to bring forward premises that could be used for self-employment.

Unemployment in Lichfield was running at 2.6 % in December, but that is still not good enough. What are the Government doing to provide an enterprise culture in practice, and how many people has my hon. Friend managed to get starting new businesses?

My hon. Friend will be aware that in Lichfield, 30 claimants have started with a business mentor. That has led to 20 businesses starting already. Some 8,000 new businesses have been started as a consequence of the new enterprise allowance, and I am pleased to announce that we are going to extend the availability of the new enterprise allowance to lone parents on income support and to some employment and support allowance claimants, because they are the sort of people who would be able to benefit from the new enterprise allowance and combine their existing responsibilities with starting a business for themselves.

May I push the Minister on what is happening to people who want to start their own business if they pitch up at Jobcentre Plus? Is it not a scandal, the way that Jobcentre Plus recycles people? Giving them a job for one day removes the onus of finding them anything, such as starting their own business, or referring them to the Work programme. There is a tension between what is happening in Jobcentre Plus and what is happening in the Work programmes that does nobody any good.

To answer the hon. Gentleman’s question about enterprise, when someone first makes a claim for jobseeker’s allowance, advisers talk to them and ask them whether they have an idea for a new business. Where they have a credible plan, they can be referred to a mentor, who will work with them to develop that business plan which, if successful, can lead to the new enterprise allowance. We see the importance of small businesses and of getting new start-ups going. Both the Work programme and Jobcentre Plus are focused on how they can help people set up a business themselves and start to recruit others.

Unfortunately, unemployment in the Rhondda is still growing. The figures for last November are higher than they were for the November before. One of the difficulties is that many of the people who have enough get up and go to set up a company get up and go elsewhere. How can we make sure that geographically isolated communities such as the Rhondda have a strong enough local economy for local entrepreneurs to prosper?

That is why measures such as the Work programme and the new enterprise allowance help lay those foundations. We need to see businesses moving to places such as the Rhondda and south Wales. I went to Swansea before Christmas to see the work that Amazon is doing there to boost employment in the local community—[Interruption.] Opposition Members may mock, but that created job opportunities that people would not otherwise have had.