HC Deb 24 July 1990 vol 177 cc203-5W
Mr. David Shaw

To ask the Secretary of State for Employment if he will make a statement on the achievements of(a) his policies and (b) his Department in helping small businesses over the last 12 months as against the previous 12 months; and if he will publish the performance indicators by which his Department monitors those achievements and the statistical results of such monitoring.

Mr. Forth

The Government have continued to place a high priority on helping small businesses, through improvements to the business climate, through deregulation and other measures and through specific programmes of support and assistance. The success of their policies is demonstrated by the latest statistics which show a record increase in the number of businesses registered for VAT, of around 1,700 a week during 1989. Over the decade the overall increase has been 373,000.

Measures operated by my Department to assist small businesses include: the small firms service, which is operated by the Training Agency of the Department, and provides information and business counselling to new and established businesses. It was a record year for the service, which carried out more counselling, more work with growing firms, and answered more inquiries during 1989–90, than ever before. In the last financial year, the service answered over 317,000 inquiries (an increase of 12.9 per cent. on 1988–89), handled over 36,000 counselling sessions (an increase of 17.7 per cent. on 1988–89), and conducted over 36,000 counselling cases (an increase of 20.4 per cent. on 1988–89).

Business growth training was introduced in 1989 to provide help to established firms to develop their business and management skills. It has already proved to be a highly successful scheme, with over 122,000 owner managers assisted to date.

My Department also provides financial assistance through the enterprise allowance scheme and makes substantial grants available to Business in the Community, local enterprise agencies and the Prince's Youth Business Trust amongst others. To take the enterprise allowance scheme as an example, it has been a great encouragement to unemployed people to go into self-employment. In the period 1989–90 over 78,000 have participated in the scheme. Since the start in 1983 over 500,000 people have taken advantage of the scheme.

The enterprise training element of employment training and the business enterprise programme help people set up in business through the provision of targeted training in all the basic aspects of business. The combined number of entrants to these programmes increased from 43,489 in 1987–88 to 59,480 in 1989–90. In addition, the graduate enterprise programme helps graduates take the first steps to setting up businesses on their own. The number of entrants to this programme rose to 1,184 in 1989–90.

Assistance of this type for the self-employed and small firms will in future be provided locally by training and enterprise councils. TECs will have the opportunity to tailor assistance to local circumstances.

The loan guarantee scheme continues to enhance smaller firms' access to finance. In the 12 months to 30 June 1990, 3,450 loans were guaranteed representing total lending of £104 million. Usage during the year remained buoyant with applications averaging 285 a month compared with 200 a month in the previous year, and 120 a month two years ago.

Over the past year I have continued my campaign to improve the access of small firms to Government contracts. My Department has published and distributed booklets designed for both Government purchasers and small firms which identify purchasing needs, departmental contacts and give guidance on improving Government purchasing procedures. I have also appointed a purchasing consultant to improve the systems by which small firms can get better access to public contracts. My Department publicises its own contracts and has produced a departmental guide for those companies that want to tender, including small firms. We have encouraged managers to use local small firms in devolving the purchasing function and budgets where appropriate.

My Department has continued with action to reduce burdens on business; through the Employment Act 1989, for example, the procedures for taking on women and young people have been simplified. We have also produced a range of advice and guidance for smaller companies, including the well-received self-employment starter pack. As well as maintaining a close interest in domestic deregulation, we are working hard to ensure that the EC's social charter does not impose unnecessary burdens, with the circumstances of small businesses very much in mind.

The Department monitors all its programmes and also commissions external evaluations which are published. In December 1989 we published an overview, "Small Firms in Britain", a copy of which is in the Library. The report surveys developments in the sector, includes key statistical indicators and outlines Government policy and measures as a whole towards small firms.