Enterprise Allowance Scheme (Hansard, 16 December 1986)

§ 3. Dr. Marek
asked the Paymaster General what is the Government's best estimate of the displacement and substitution effect of the enterprise allowance scheme.

§ The Parliamentary Under-Secretary of State for Employment (Mr. David Trippier)
It is difficult to obtain reliable information on the displacement and substitution effects of the enterprise allowance scheme. The limited evidence available suggests that displacement and substitution may possibly be about 50 per cent. Given the large degree of uncertainty, I am not satisfied with that figure and have asked the Manpower Services Commission to commission research into the methodology of measuring displacement.

§ Dr. Marek
When will the Minister realise that he cannot have a flourishing private enterprise scheme in a massively deflated economy? Does he agree, in line with recent studies, that the present enterprise allowance scheme lends support to the black economy? If so, what will he do about it?

§ Mr. Trippier
The scheme does not lend support to the black economy. The substantive question on the Order Paper refers to substitution and displacement, and the scheme will displace many people who are already in the black economy. I would have thought that the hon. Gentleman would welcome that as much as I do. All the evidence shows that we have the highest number of self-employed that we have seen for the past 60 years, and that has been achieved principally under this Government.

§ Mrs. Virginia Bottomley
Will my hon. Friend confirm that follow-up research suggests that three out of five of 1040 those on the enterprise allowance scheme are still in work three years later, bringing with them more jobs? Is he aware that many people in my constituency have benefited from this scheme and that they greatly appreciated it as a bridge from reliance on benefit to self-sufficiency in self-employed posts?

§ Mr. Trippier
The scheme is a particular success in my hon. Friend's constituency. It is important to stress that the figures show that for every 100 successful businesses under the scheme, 99 additional jobs have been created. The survey which has been conducted thus far will merely be a chapter in a long-running novel and will show that in future many more jobs will be created by people who have been set up under the scheme.