HC Deb 20 July 1987 vol 120 cc3-5W
Mr. David Shaw

asked the Secretary of State for Employment if he will make a statement on the achievements of his Department in helping small businesses over the last three years; and if he will publish the performance indicators by which his Department monitors those achievements and the statistical results of such monitoring.

Mr. Cope

Overall responsibility for small firms sector was transferred to the Department of Employment on 3 September 1985. The promotion of enterprise and the exploitation of its potential for job creation have a high priority in the Department's objectives. The Department also monitors and seeks to influence relevant policies of other Departments so that they will benefit the sector. In England the regional enterprise units have been set up to represent and promote the Government's interest in enterprise and small firms at a regional and local level.

The number of small firms in the United Kingdom has been steadily increasing. From 1980 to 1985 there was an average net increase of around 500 per week in the total stock of businesses registered for VAT. The number of self-employed people in the United Kingdom has also risen continuously in recent years, from 1.9 million in mid-1979 to 2.7 million in December 1986.

Steps taken by the Department of Employment during the last three years specifically to help small firms are listed below:

Advice and Information

A major priority has been to make information and advice more accessible to small businesses and the self-employed through the small firms service, local enterprise agencies, the Manpower Services Commission's jobcentres and the publication "Action for Jobs".

The small firms service monitors performance by three main indicators as set out below, the figures refer only to England. The operation of the service in Wales and Scotland is administered by their respective development agencies.

Inquiries New cases Counselling sessions
1984–85 242,101 24,955 34,180
1985–86 255,228 25,361 35,114
1986–87 280,328 27,158 38,210

Local Enterprise Agency Grant Scheme

A five year scheme of financial assistance designed to establish a network of viable self-supporting enterprise agencies was introduced on 1 April 1986. The purpose of these agencies is to provide advice and help to both the budding and the existing entrepreneur. The objective of the scheme is to encourage greater private sector support for the agencies — by matching, up to a limit, the amount of that support with Government support—and towards that end approximately £2.5 million in grants was made available in the first year to about 170 agencies. A further £2.7 million is being made available in 1987–88.


The Manpower Services Commission has been refocusing its adult training programme at the Department's request to take greater account of small firms' training needs. Its Training for Enterprise budget has been increased from £9.0 million in 1984–85 when it assisted 7,870 people, to £11.6 million in 1985–8 6 which assisted 25,000 people and £18.6 million in 1986–87 benefiting 67,000 people. The estimate for 1987–88 provides for expenditure of £19.3 million helping 68,600.

Enterprise Allowance Scheme

Over the last three years the scheme has expanded rapidly and the number of entrants in each year were as follows:

1984–85 46,036
1985–86 60,036
1986–87 86,751

Provision for 102,500 entrants has been made for 1987–88. The rules of the scheme were widened in 1986 to allow non-independent businesses such as franchises, agencies and distributorships to be set up with scheme support, and greater emphasis is now being placed on counselling and training for applicants. The results of a survey of applicants joining the scheme in 1984 showed that of those received the allowance for a full year 76 per cent. were still trading 18 months after start-up, and for every 100 of these businesses 91 additional jobs have been created.

(6) Loan Guarantee Scheme

This scheme was extended for a further three years in the 1986 Budget. The cost to borrowers through the premium payable has been reduced from 5 per cent. to 2.5 per cent. of the guaranteed amount outstanding. The guarantee covers 7 per cent. of the loan.

In 1986–87 1,050 guarantees were issued with a total value of £40.4 million.

(7) The Prince's Youth Business Trust

The Department has agreed to match private sector donations to the Prince's Youth Business Trust. The Department's contributions is to be used to provide loans to young people setting up in or expanding an existing business.

(8)Health and Safety

The Health and Safety Commission's small firms working group, chaired by an employer-nominated commissioner, has special responsibility for the interests of small firms. A number of publications aimed specifically at small firms, have been produced and distributed. The Health and Safety Executive is also preparing a general guidance handbook on health and safety problems in small businesses, which will be available shortly. In addition, inspectors receive training on the problems of small firms. In 1985–86 the factory inspectorate visited 17,650 new establishments of which they believe the majority will have been to firms with 25 or fewer employees.

(9)Employing People

The Department has produced a simplified guide to employment legislation for small firms' advisers, along with a model employment form and notice board kit aimed to help small firms in particular. In March the Department published a cartoon leaflet and series of fact sheets on employment law, designed to help those employing people for the first time. In addition, the Advisory, Conciliation and Arbitration Service has published a booklet for small firms with information on various aspects of employing people.

(10)Performance Indicators

The Department monitors all its schemes with a view to assessing additionality, job creation, displacement and other relevant factors. Evaluation reports on particular schemes are published where relevant. The size of the small firm sector is regularly monitored by reference to the number of such firms registered for VAT.

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