Disadvantaged Areas (Hansard, 22 June 2000)

§ Mr. Timms

The Government's aim is to help create a supportive environment for entrepreneurial activity in all sections of society. Long-term unemployed people who want to move into self-employment are being helped with support under New Deal options nationally; while the Employment Zone pilot in Plymouth has been helping long-term unemployed adults aged 25 plus to get back into work, including the opportunity to pool benefits, training and job search funds to help with business start-up costs, since April 2000. We will also be offering New Entrepreneur Scholarships in high unemployment areas, to equip potential entrepreneurs with the management and business skills needed to turn their aspirations into successful businesses. A pilot programme will be running in Cornwall (and London and Manchester) later this year, before a national roll-out in September 2001.

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Moreover, the Government announced in November 1999 the creation of a new Phoenix Fund, with £30 million to invest over three years in promoting better access to business support and finance in deprived areas. This includes: a development fund to promote innovative enterprise support in deprived areas, including incubator units; a national challenge fund to help resource community finance initiatives, and to evaluate the variety of approaches and distil best practices; loan guarantee support for community finance initiatives borrowing from wholesale sources of finance, so that they can on-lend in deprived areas; and a network of mentors to pre and early phase business start-ups through a new Business Volunteer Mentoring Association, being run on a pilot basis until April 2001.

The Department of Trade and Industry has lead responsibility for the Phoenix Fund, including the disbursal of funding and business support in the South West.

The Government have also instigated a range of measures in recent Budgets, including cuts in capital gains tax and corporation tax, and enhanced capital allowances, which will benefit many of the 65,000 small and medium-sized enterprises (SMEs) in disadvantaged areas and the wider South West region. Moreover, the Government are currently financing a network of regional venture capital investment funds for early-stage SMEs, and contributing to a regional target of £85 million for the South West. The first steps towards this target are being taken now with the regional venture capital competition being run by the DTI.

The Small Business Service is also tasked with the brief of reaching-out to start-up and existing enterprises in disadvantaged communities, to increase accessibility of business support.

We are also bringing schools and businesses closer together, particularly those in high unemployment areas. We have already provided an extra £10 million nationally to boost enterprise skills in our schools. The new National Enterprise Campaign, launched this month, includes a particular focus on our high unemployment areas.