HC Deb 20 November 1984 vol 68 cc133-4
2. Mr. Squire

asked the Secretary of State for Employment if he will make a statement on the future of the enterprise allowance scheme.

The Parliamentary Under-Secretary of State for Employment (Mr. Alan Clark)

As my right hon. Friend announced in the House on Monday 12 November — [Official Report, Vol. 67, column 445–46]—the scheme will be extended and expanded from 1 April 1985 to provide places for up to 1,250 people each week in 1985–86.

Mr. Squire

I congratulate my hon. Friend on that excellent news. May I ask for his confirmation that a very high percentage of the enterprises thus established remain active and are playing a major role in reducing unemployment?

Mr. Clark

Yes, my hon. Friend is right. Up to 75 per cent. of those receiving the allowance are still trading 18 months after start-up and thus 6 months after the allowance has stopped. In addition — and perhaps more significantly—over 50 additional jobs are created for every 100 firms supported in the first instance.

Mr. Madden

What advice can the Minister give to a constituent of mine who took voluntary redundancy from British Rail last December on the basis that the enterprise allowance would be available, but was told in April that the scheme had been terminated? He subsequently lost his redundancy money, his firm has failed, and he is seeking compensation from the Department of Employment for misinformation.

Mr. Clark

If the facts are as the hon. Gentleman has stated them, it is clear that a serious mistake was made. I assume that he has written to me about it. However, the papers have not yet reached my desk.

Mr. Speller

Will my hon. Friend bear in mind the greatest anomaly of all? When one member of the family receives the enterprise allowance, if another member of the family, such as the wife, then becomes unemployed, the DHSS deducts the enterprise allowance from the gross income of the family, thus rendering ineffective the whole purpose of the scheme. Will my hon. Friend bear that point in mind when considering the future of the scheme?

Mr. Clark

With respect, that is not fair. The allowance is a form of income and where incomes are aggregated those procedures apply. The DHSS is following the proper procedures.

Mr. Wigley

Is the Minister aware that there are many people who apply for places on the scheme well within the 12 months during which they receive unemployment benefit, but if they have to wait to join the scheme they lose the benefit because the 12-month period is exceeded. Would it not be better if people's entitlement began on the date on which they first applied?

Mr. Clark

The hon. Gentleman draws attention to a state of affairs which, regrettably, did exist during the period when there were very long waiting lists. Thanks to the developments that my right hon. Friend has announced, the waiting lists have been reduced to three or four weeks in most parts of the country. I therefore hope that this disappointing situation will no longer apply.