§ Mr. David ShawTo ask the Secretary of State for Employment if he will make a statement on the achievements of his Department and his policies in helping small businesses over the last 12 months compared with 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. Eggar[holding answer 24 July 1989]: The Government's priorities in helping small businesses are to create a climate in which they can flourish and to provide measures that support and stimulate their development. An improved climate has been achieved primarily through the Government's measures to control inflation and to reduce both the rates of taxation and the level of unnecessary burdens placed on small firms.
761WMeasures operated by my Department to assist small businesses include:
The Small Firms Service which provides information and business counselling to new and established businesses. In the last financial year, the service answered over 281,000 enquiries (an increase of 6 per cent. on 1987–88), handled over 30,000 new counselling cases (an increase of 12 per cent. on 1987–88), and conducted over 43,000 counselling sessions (an increase of 10 per cent. on 1987–88);
The loan guarantee scheme. Over the past 12 months usage of the scheme has greatly increased. Applications are currently averaging 240 a month compared with last year's average of 164 per month. This increase has been due in part to the introduction of simplified procedures for loans up to £15,000 and a re-launch of the scheme in April 1989 when it was extended and enhanced following a major evaluation exercise. Changes made included increasing the maximum loan size fom £75,000 to £100,000;
The enterprise training element of employment training and the business enterprise programme. These 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 by 22 per cent. from 43,489 in 1987–88 to 53,003 in 1988–89. 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 from 155 in 1987–88 to 1,150 in 1988–89. Business growth training has now been introduced to provide help to established firms to develop their business and management skills.
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, among others.
The Department monitors it's schemes with a view to assessing additionality, job creation, displacement and other relevant factors. Evaluation reports on particular schemes are published. Overall the success of these measures has been reflected in substantial and accelerating growth of the small business sector.
Over the period 1980 to 1986 the net increase in the number of VAT-registered businesses averaged nearly 500 per week. The average figure increased to nearly 900 a week in 1987 and indications are that the rate of increase in 1988 has been even faster, perhaps as much as 1,200 per week. Between 1979 and 1989 the number of self employed people increased by 61 per cent. to approximately 3.1 million.