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Volume 717: debated on Thursday 25 February 2010


Asked By

To ask the Secretary of State for Business, Innovation and Skills what measures Her Majesty’s Government are taking to encourage people who are unemployed to move into self-employment.

My Lords, as part of our response to the economic downturn, we have introduced a support package to help jobseekers to consider self-employment as a route off benefits. Nearly 16,000 people have accessed support through Business Link in England since 6 April 2009. That includes a tax-free credit of £50 a week for up to 16 weeks when the person starts trading. To date, nearly 1,000 people per month have taken advantage of that credit.

My Lords, I thank the Secretary of State for that Answer. Can he tell us why the New Deal self-employment option has dwindled so far below the level that it was at when it was the enterprise allowance scheme and was running at 100,000 a year?

My Lords, in my view, the initiatives taken by the Government have encouraged the self-employment option to be taken up among jobseekers. The Department for Work and Pensions self-employment support package was, as the noble Lord probably knows, originally introduced as part of the six-month offer in April 2009 to provide a significant programme of enhanced support for jobseekers. I think the information I gave in my original Answer supports our contention that that is being extended; it is being rolled out and it is being taken up. The current programme is expected to run until March 2011 and I suspect that it will gather a lot of interest, support and considerably more self-employment, which we welcome.

My Lords, what steps are being taken to offer adult apprenticeships to those men and women who are unemployed, many of whom did not get the chance to do apprenticeships when they were school-leavers? If they are trained and given skills, particularly in the building industry, there is a good possibility of their becoming self-employed.

My Lords, the noble Lord makes an extremely valid point, which is why the Government have invested what are frankly colossal amounts in doubling and more the size of the apprenticeship programme in this country, and why, in my review of the Government’s skills strategy, I announced the creation over the coming two years of 35,000 new advanced technician-class apprenticeships. It is vital that in the provision of further and continuing education, we attract, stimulate the interest of and present options to older people, as well as school-leavers, to engage in apprenticeships and, once they have undertaken apprenticeships—if they so choose, and are suitably qualified—to go on to higher education, as, I am glad to say, many are doing. I fully sympathise with what the noble Lord said.

My Lords, I appreciate the breadth of the noble Lord’s portfolio, but will he say something about his and the Government's view of how they can assist people who are self-employed across the difficult threshold of growing their businesses and beginning to employ staff, perhaps from their own home, with all the associated planning difficulties? As he will appreciate, that is a particular issue in the countryside.

My Lords, I entirely agree with the desirability and need for everyone, including those who live in the countryside, to be able both to create their own businesses—whether from their home or otherwise—and to recruit new employees. I am glad that the Government are giving such support, through the measures and programmes that I described, to enable people to become self-employed. It is also important for the Government to consider additional ways and incentives for SMEs to recruit employees.

My Lords, I must say to the Secretary of State that bureaucracy is a problem with regard to self-employment. Many people who have just entered self-employment have been fined for failing to register as self-employed quickly enough. In 2009, more than 23,000 people were fined for registering late. Many people going into small business do not realise that there are all those requirements. I could give other examples. That is a great difficulty and a barrier to getting into self-employment.

My Lords, it is the Government's firm desire to put away the barriers that stand in the way of such people, to give them proper encouragement and to facilitate the creation of new business and self-employment. That is why, under the jobseeker’s allowance self-employment offer, there are two elements to the help available to people who want to move into self-employment or start a business: first, self-employment advice and support provided through Business Link; and, secondly, financial support provided by the Department for Work and Pensions for those leaving jobseeker’s allowance and becoming self-employed. I would be the first to acknowledge that if, in providing that advice, support and financial assistance, we make it such a ghastly rigmarole for people to navigate their way through the bureaucratic hoops ever to get to it, we are not doing as good a job as we might. We must remain vigilant about that. There is no point in setting up programmes if we then create so many hurdles to climb over to get access to them.