HC Deb 23 December 1981 vol 15 cc451-2W
Mr. Heddle

asked the Secretary of State for Employment if he will now announce further details of the enterprise allowance scheme.

Mr. Peter Morrison

I am pleased to be able to give further details of the Government's Enterprise Allowance Scheme which was announced by my hon. Friend the Under-Secretary of State for Industry in the House on 13 November 1981.

This new scheme, which will be operated by the Manpower Services Commission, is intended to help unemployed people who want to start up in business but who may be deterred from doing so by the fact that they would lose their entitlement to unemployment or supplemetnary benefit. The scheme is being introduced as a limited pilot experiment, and will be open for applications from 25 January 1982. A sum of £2.1 million has been made available from existing resources for the experiment. No applications will be accepted after 1 March 1983.

It will operate in three pilot areas:

  1. 1.Coventry, comprising Coventry city council area.
  2. 2.Part of North-East Lancashire, comprising the Pendle, Hyndburn, Burnley and Rossendale borough council areas.
  3. 3.Medway, comprising the Rochester upon Medway, Gillingham and Graveshann borough council areas.

Applicants must live and intend to set up their business in one of these three pilot areas. The allowance will be a flat rate taxable £40 per week paid fortnightly for a maximum of 52 weeks.

To be eligible, applicants will need to have been unemployed for at least 13 weeks and must be receiving unemployment or supplementary benefit at the time of making their application. Time spent under formal notice of redundancy will count towards the qualifying period of 13 weeks.

The minimum age will be 18. The allowance will not be payable to people who have reached State pension age.

Applicants will have to show that they have available at least £1,000 which they intend to invest in the business.

No industry will be excluded, but the Manpower Services Commission will have discretion to reject applications that are considered unsuitable for support from public funds.

The pilot schemes will be operated by local jobcentres in the pilot areas with help from the Department of Industry's small firms service, whose counselors will provide advice and guidance to those entering the scheme. The pilot experiment will be carefully monitored and evaluated.