Current rules allow jobless entrepreneurs to apply for funding of £1,274 plus access to a guaranteed loan of up to £1,000 – but only after they have been claiming Jobseekers Allowance (JSA) for six months.
Now the All Party Parliamentary Small Business Group (APPSBG) is calling for the New Enterprise Allowance to be made available from day one of signing onto JSA and for funds to be available for a full year to provide £3,692 plus the guarantee of a loan of up to £2,000. The APPSBG believes that this would encourage more budding entrepreneurs to set up in business, in turn helping to boost the economy and stem high unemployment.
The APPSBG is concerned that the current funding is too low to enable budding entrepreneurs to get viable business ideas off the ground.
The scheme is very similar to one introduced in the 1980s by Lord Young for the Thatcher Government.
Breaking down barriers
The recommendation comes in a report from the APPSBG, ‘Breaking down the barriers to entrepreneurship', which also calls on the Government to:
- Support enterprise education in schools and colleges by incorporating it into the statutory curriculum
- Create a one-stop-shop to provide advice and support, such as a Small Business Administration
- Adopt and put in place the Breedon recommendations to bolster alternative sources of finance
- Provide a support network for older entrepreneurs to ensure that Jobcentre Plus builds relationships with women's networks to promote mentoring for women.
The report comes following an Entrepreneurship Inquiry launched by Iain Duncan Smith MP, Secretary of State for Work and Pensions to see how the barriers to self-employment can be removed and entrepreneurs can be supported in setting up their business in difficult economic times.
Brian Binley MP, Chair of the APPSBG, said: "What this report shows is the importance of nurturing business and developing the culture to enable it to thrive. Not only must we create the conditions to help ensure that the education and financial systems are available to supply potential entrepreneurs, but society embraces the enterprise culture whose full potential is yet to be explored is these difficult times."
If you wish to comment on this article, please log in and use the Reply button below. Registering is free and easy - see 'Join Shout99'.
Susie Hughes © Shout99 2012