HC Deb 08 July 1999 vol 334 cc1157-9
1. Mr. Chris Pond (Gravesham)

How he proposes to improve the promotion of self-employment through the new deal. [88964]

The Minister for Employment, Welfare to Work and Equal Opportunities (Mr. Andrew Smith)

We are promoting the self-employment option through personal advisers. By the end of May, 1,800 young unemployed people had started on new deal business courses, 800 had started test trading and more than 100 were independently running their own businesses. The very best promotion for the new deal self-employment option is the success of young people themselves, such as Mark Venning in Plymouth, who has not only started his own business through the new deal, but is now poised to recruit his first new deal employee.

Mr. Pond

I thank my right hon. Friend for that answer. Is he aware that my hon. Friends in north Kent and I have carried out an inquiry into the operation of the new deal in our area? Generally, the response from those involved has been positive and enthusiastic. However, the concern is—it is certainly the perception—that the potential for self-employment has not been fully exploited. In building on the success of the new deal, and in developing the new ONE service, will he give the House an assurance that he will consult organisations such as the Prince's Trust, to ensure that young people with a good business idea can use their energies, talents and abilities to move out of unemployment and into self-employment?

Mr. Smith

I congratulate my hon. Friends on their work locally, which builds on the extensive involvement of hon. Members in the new deal. That has been something of an innovation, and has greatly contributed to the success of the programme. We are working closely with the Prince's Trust Business, and I was pleased recently to announce, with the support of all parties in the House, an extra £50 million of matched funding, which should enable an additional 30,000 young people to start their own businesses over the next five years. A significant proportion of those 30,000 will be new deal young unemployed people.

Mr. Roy Beggs (East Antrim)

The Minister's statement is encouraging for those who have taken advantage of new deal opportunities. Does he agree with me and many colleagues present that there are individuals throughout our constituencies who did not achieve much academically at school, but who after leaving school have, with initiative and support, become successful in self-employment? Does he further agree that organisations such as the local economic development enterprise groups in Northern Ireland, which encourage new business start-ups, could provide support; and that, through the new deal, placements could be found for business start-up in such organisations?

Mr. Smith

Yes, I do agree. I thank the hon. Gentleman for his support for the programme, which, if it can help to tackle the historically high unemployment in his constituency and in neighbouring areas, will make a big contribution to overcoming the sectarian divisions that must be overcome if we are to make a success of the peace process, which we all want. I commend the efforts of start-up bodies, the Employment Service in Northern Ireland and local businesses, which are doing their bit in a great partnership effort to give new hope to young people who have had a rough start in life.

Mr. John Healey (Wentworth)

My right hon. Friend has recently announced continuous improvement targets for next year of 6 per cent. to boost the number of young people going into unsubsidised and subsidised jobs. They are good, fair targets. Will he confirm whether similar improvement targets have been set for the self-employment option, given its importance within the new deal programme? If not, will he consider doing so?

Mr. Smith

Yes, indeed. It is actually a 6 percentage point improvement, which could mean an increase of as much as a third in some of the poorly performing units of delivery, and an increase of about 8 per cent. even in the best performing units. People who are securing self-employment through the new deal self-employment option are included in those targets.

I shall give further thought to the question of whether we need specific targets for self-employment. I would inject a note of caution, however, because self-employment is not a realistic aspiration for everyone, and it is important that young people who start up their own business do so with their eyes open and with the right degree of support.

Mr. John Bercow (Buckingham)

We welcome any chance for new deal recruits to end up working for themselves, especially as most of them have had little chance to end up working for anyone else. On the right hon. Gentleman's own admission, more than 16,000 recruits have gone back on benefits, almost 40,000 have disappeared to destinations unknown, and three quarters have failed to find employment. The Business Services Association, which started by supporting the scheme, says that the new deal has not proved effective at matching candidates to job vacancies. What guarantee can the right hon. Gentleman give the House that his latest scheme will not be as big a failure as his previous botched efforts?

Mr. Smith

I congratulate the hon. Gentleman on his appointment to the Front-Bench team. It is the first opportunity I have had so to do—[Interruption.]—although my hon. Friend the Member for Bolsover (Mr. Skinner) says that the hon. Gentleman is obviously still in the gateway stage.

As the new deal has already helped 100,000 young people off benefit and into jobs and cut long-term youth unemployment since its introduction by two thirds, and as this country now has the lowest youth unemployment for 25 years, I should have thought that the hon. Gentleman would support the efforts of the Employment Service, our partners, and employers throughout the country to make the new deal a success—offering hope and opportunity for young people—rather than try to undermine it.