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Enterprise Allowance

Volume 563: debated on Monday 20 May 2013

I believe that the new enterprise allowance has been very effective in helping people set up their own business. As at the end of November last year, 31,540 have received or are receiving support from a mentor, and more than 15,000 have commenced trading. As my hon. Friend knows from his own experience, self-employment not only enables people to take responsibility for themselves and their family’s welfare, but gives others the chance of a job as the business grows.

Does my hon. Friend agree with me— I speak as somebody who ran their own business for 20 years before coming to this place—that the role of volunteer business mentors is crucial in that step between the classroom and self-employment?

My hon. Friend is absolutely right. I congratulate the voluntary mentors who are taking their role seriously, helping people to get into work and identify ways of setting up their own business. On Thursday, I was in Bradford talking to a group called Inspired Neighbourhoods, which promotes self-employment in its area and provides many voluntary mentors to help people take advantage of those opportunities.

Given the difficulties and challenges in setting up a business, does the Minister agree that it is essential that the advice given ensures that people can succeed, so that they do not end up in a worse situation than if they had not gone down that route in the first place?

The hon. Gentleman is right. That was one of the lessons from Inspired Neighbourhoods, which sat down with people and said, “This is the amount of money you need to make from your business to ensure you become free from benefits and help your family to look after themselves.”

21. I am sure my hon. Friend will join me in welcoming last week’s employment figures, which show that the number of people claiming jobseeker’s allowance in Reading East is now at its second lowest level since February 2009. Given Labour’s poor track record of securing sustainable employment, does he agree that the Opposition’s proposed job guarantee would fail to provide as many positive outcomes as the new enterprise allowance? (155879)

My hon. Friend is absolutely right to highlight the fact that the number of people claiming JSA fell by 7,000 last month, which also saw the 11th consecutive monthly fall in the number of young people claiming jobseeker’s allowance. The measures we are taking demonstrate the effectiveness of our programmes, particularly the new enterprise allowance.

Will the Minister explain why people on the Work programme are not allowed to take up the new enterprise allowance and why he does not do more to encourage Work programme participants into self-employment?

The hon. Lady should be aware that a large number of Work programme providers see self-employment as a route out. For example, I know from talking to Avanta, which operates the Work programme in the north-east and elsewhere, that it sees lots of opportunities for people to get into self-employment and supports them to do so.

Does my hon. Friend agree that, as well as providing opportunities to get into self-employment, the small businesses generated are potential generators of many jobs? Has he seen the academic work showing that in business cycle after business cycle, small businesses created during a recession have a much higher chance of survival than those created at other points in the cycle?

That is a very good point. When I have visited jobcentres, I have seen examples of people who have created employment opportunities for themselves and others as a consequence of setting up their own business. That is a testament to the strength and resilience of the sector.

Does the Minister realise—I tell him this as someone who has employed a lot of people in social enterprise—that social enterprise is also a good destination for entrepreneurs? Is he aware of the critical importance of high-quality mentoring? I know he went to Bradford; he could have come to Huddersfield to see the Enterprise Foundation. The quintessential success of that operation was down to good mentoring and trained mentors who carry on mentoring over the long term.

Indeed. I went to Portsmouth last month to see the Cathedral Innovation Centre, which was working with people from the Royal Society of Arts and Portsmouth university business school, as well as volunteers, to provide the right sort of mentors to enable social enterprises to get set up and be successful.