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Tag: 1999

  • HISTORIC PRESS RELEASE : Enhanced role for credit unions [November 1999]

    HISTORIC PRESS RELEASE : Enhanced role for credit unions [November 1999]

    The press release issued by HM Treasury on 16 November 1999.

    Moves to boost credit unions, announced by Economic Secretary Melanie Johnson today, will provide a new central services organisation and changes to the regulation of credit unions to help them to deliver a more consistent and flexible service to members.

    The announcement accepts recommendations in two reports published today, by the Credit Unions Taskforce, under the chairmanship of Fred Goodwin, and by the Policy Action Team looking at ways to improve individual access to financial services. These found that credit unions can provide safe, low cost loans, which are of particular help to those in disadvantaged communities who have problems gaining access to mainstream credit sources.

    Welcoming these changes Miss Johnson said:

    “As Fred Goodwin’s report on credit unions shows, the way in which they have previously operated has delivered benefits to members, but now needs to be updated to face today’s challenges.

    “Taken together, these measures should ensure an enhanced role for the future. Members should benefit from the improved and cheaper services which the central services organisation can provide, from the greater freedoms proposed, and from greater protection for their savings.

    “These changes follow widespread consultation with the movement and will, together with other initiatives also announced today, help them to play a part in tackling the problems of financial exclusion. The establishment of a central services organisation will, by spreading best practice and drawing on the expertise and resources of banks and building societies, help credit unions to improve the delivery of their services.”

    “The Government expects banks and building societies to play their full part, but in the end it is for the credit union movement – the hundreds of hard working and dedicated volunteers throughout the country – to take advantage of these opportunities.”

    Commenting on the Taskforce report, Fred Goodwin said:

    “Credit unions have proved their worth around the world as financial institutions for those of modest means. The time is right for them to make a substantial contribution to reducing financial exclusion. There is much that banks and building societies can do to help them achieve this goal, and I am confident that they will rise to this challenge.”

    The measures to improve the regulatory framework within which credit unions operate are:

    • increases in the maximum repayment periods for loans
    • greater flexibility in the common bond requirements
    • aligning the maximum amount that can be held in youth accounts with that for adults
    • removal of the maximum membership limit
    • allowing credit unions to charge for ancillary services
    • greater flexibility on disposing of re-possessed collateral
    • further consultation on increasing the sources from which credit unions can obtain credit, and greater flexibility on dividend accounts an improved regulatory framework.

    Announcing the new regulatory regime, Miss Johnson added:

    “We have decided to give the Financial Services Authority the power to make rules for the regulation of credit unions, which will mean in future credit union members will have protection similar to that for bank and building society customers, including membership of a share protection scheme.

    “The FSA has assured the Government that it will supervise credit unions in a way which takes account of the needs of small, voluntary organisations, including their ability to pay fees.

    “The FSA will discuss with other financial institutions the problems which credit unions would face in meeting the costs of regulation, including compensation and Ombudsman schemes. The Government hopes that the financial industry will respond positively and constructively to these discussions. The FSA will also establish a taskforce which will work closely with the sector to ensure a smooth transition.”

  • HISTORIC PRESS RELEASE : Initiatives to tackle financial exclusion [November 1999]

    HISTORIC PRESS RELEASE : Initiatives to tackle financial exclusion [November 1999]

    The press release issued by HM Treasury on 16 November 1999.

    Six initiatives to help people in disadvantaged communities excluded from key financial services were announced by Economic Secretary Melanie Johnson as the initial response to proposals in a Treasury Policy Action Team (PAT) 14 report published today.

    These are:

    an improved regulatory framework for credit unions
    a new central service organisation to support and enhance the role of credit unions
    support for more widespread introduction of insurance with rent schemes for home contents insurance
    exploring the possibilities for widening the role of the Social Fund to help those in low-paid employment
    better access to counselling and refinancing for those in debt
    greater disclosure by banks of their provision of services to the socially excluded.

    Welcoming the report, commissioned as part of the initiative to tackle social exclusion in poor neighbourhoods announced by the Prime Minister last year, Miss Johnson said:

    “Financial exclusion limits the ability of many of the poorest in society to have the benefits of the ever increasing range of financial services, eg bank and building society accounts, access to affordable credit and insurance, that the rest of us take for granted.

    “Two million adults in the UK do not use financial services. It means that they pay more for meeting household bills, do not have home contents insurance or save effectively. We need to spread these benefits as widely as possible, and to look for new ways to do so.

    “The Government will announce its full response to the report next year as part of its national strategy for neighbourhood renewal, but we are already looking forward to making progress in three areas.

    “Credit Unions offer people access to cheap small loans, but their impact in Britain so far is much less than in other countries. We will encourage their growth through a new central services organisation which can support new and existing credit unions, and changes to their regulatory arrangements.

    “Home insurance is also a problem. We will look at ways of improving access to insurance services, particularly through insurance with rent schemes, to help more people get, effective and affordable insurance services. We will work with the industry and public sector agencies to develop challenging targets to improve access to insurance services.

    “We want to improve access to affordable credit. One possible development could be the use of the DSS Social Fund to help those in low-paid employment keep out of the hands of high-cost moneylenders. We shall also promote wider access to debt counselling and refinancing for those who already have debt problems.”

    The general theme of the report is that the way forward in tackling financial exclusion is the development of new ways to access and deliver financial services.

    Among the other alternatives identified are: exploring ways in which the network of post offices could contribute to additional delivery channels; greater use of Pay Point bill payment and Money Advice Centres; greater involvement for housing associations and local authorities; and best use of available and developing technologies by all agencies, including banks and building societies, to ensure easier and more open access.

    The report also calls for better designed financial services for those unfamiliar or uncomfortable with existing services, including basic bank accounts – which allow people to pay their essential bills more cheaply without risk of an overdraft, and more attractive household and savings insurance products tailored specifically to their needs.

    Miss Johnson added :

    “The report recognises that there is no single or simple solution. The way forward lies in developing new and alternative means to deliver and provide access to financial services as well as ensuring that those existing services can reach the whole community. It also means ensuring that communities themselves can contribute to progress in helping their members share the access to and use of financial services that the rest of us see as essential and take for granted.

    “It recognises that banks, building societies, credit unions, and local agencies are already working in partnership with Government to achieve practical changes – ways to develop existing and alternative services, seeing commercial as well as social benefit in doing so.

    “The PAT 14 report is against compulsion. It emphasises instead removal of unnecessary barriers, development of the right products, opening up of new delivery channels and consumer education, and the provision of better information about banking services.

    “The Government continues to have high expectations of banks and other financial service providers, including a greater degree of disclosure of services provided to those in deprived neighbourhoods. We will work with the banks on developments in response to this report. We do not want to have to legislate, as some have urged, to compel banks to serve all sections of the community; but if voluntary action is unproductive and monitoring shows insufficient progress, it may be necessary to consider other options.”

  • HISTORIC PRESS RELEASE : Biggest Reform of Public Finance Management since the Gladstone Era [November 1999]

    HISTORIC PRESS RELEASE : Biggest Reform of Public Finance Management since the Gladstone Era [November 1999]

    The press release issued by HM Treasury on 19 November 1999.

    The biggest reform and modernisation programme in the management of the country’s public finances since the Gladstone era was announced today by Chief Secretary to the Treasury, Andrew Smith.

    The Government Resources and Accounts Bill (RAB), published today, is part of the government’s fiscal framework aimed at its modernising agenda and is to apply the financial reporting practices of the private sector and much of the public sector to central government.

    Welcoming the Bill, Andrew Smith said:

    “Resource Accounting and Budgeting is a vital part of our modernising agenda and this Bill marks a major milestone on our way to full implementation. It demonstrates this Government’s commitment to introducing best-practice accounting methods in line with the Code for Fiscal Stability.

    “Through Partnerships UK, the Bill will also give the public sector access to private sector skills. I want to see the progression of well-structured Private Finance Initiative (PFI) and Public Private Partnership (PPP) projects delivered in all sectors of the economy. This will bring about improved front line services to the public, increased deal flow togther with a reduction in the cost, delay and uncertainty by bidders for PFI projects.”

    The main purposes of the Bill are:

    • to introduce Resource Accounting and Budgeting into Government accounts and to modernise the operation of other aspects of the Exchequer and Audit Departments Acts;
    • to provide enabling legislation for the preparation and audit of consolidated accounts for the whole public sector;
    • to spend the money required to set up Partnerships UK to facilitate a new body designed to make the public sector a better client in PFI/PPPs.

    The Resource Accounting and Budgeting Bill will improve the way Parliament votes and scrutinises public spending. Objectives and outputs will be costed through RAB, underpinning the Public Service Agreements. There will also be better information on buying and using assets with improved comparisons between PFI/PPP projects and government capital spending.

  • Stephen Timms – 1999 Speech at the Launch of the CBI Report on Corporate Venturing

    Stephen Timms – 1999 Speech at the Launch of the CBI Report on Corporate Venturing

    The speech made by Stephen Timms, the then Financial Secretary to the Treasury, on 11 November 1999.

    Introduction

    1. Thank you for inviting me to speak to you today. Over the past two and a half years this Government has started to build a new Britain which we want to be modern and decent – a new enterprise economy open to all the talents. That’s why the Chancellor set out on Tuesday as ambitions for the next decade the goals that we should have productivity moving closer to our major competitors, a larger proportion of people in work, halve the number of children in poverty, and for the first time over half of our school leavers should go on to study for a degree.
    2. For too long British investment has been too low, productivity increases too slow, the potential of new markets, new technologies and new skills too often squandered. I want that to change and for corporate venturing to fulfil its potential in the new Britain, promoting long term investment across British businesses. 

    The report

    1. The CBI/Natwest report into corporate venturing is a timely piece of research – highlighting the important benefits that corporate venturing can bring.
    2. Compared to the US, corporate venturing in this country barely skims the surface of the investment pond. When I was in Silicon Valley, in September, I met Stephen Nachtsheim, the Vice President for Corporate Business of Intel. He told me that Intel had invested over $3 billion dollars in more than 250 companies – most of them start-ups – some working from the owners’ garage. Corporate venturing is having a big impact on they way Intel does business and is as integral to their corporate strategy.
    3. Case studies in the report show that companies outside the US have also benefited from corporate venturing. Reuters, the information service provider, is helping to reshape its business through corporate venturing. 3M is using corporate venturing as a part of its growth strategy for the continued generation of new ideas, products and technologies.
    4. But examples like these outside the US are scarce. The report says, many large firms still don’t really know what corporate venturing is. And that worries me.
    5. We are in an era where business is changing dramatically, where the difference between business success and failure is the speed at which new technologies are adopted. British business is missing out on the benefits of corporate venturing.
    6. For example, in 1997, Intel conducted virtually no business on the Internet. In 1998, their Internet business had risen to 20 per cent thanks to corporate venturing. And this year they expect to carry out a staggering 50 per cent of all their business over the World Wide Web. It is becoming ever more noticeable that in the relentless competition of today’s global markets, large Goliaths of industry who cannot defeat the quicker Davids join them instead – creating innovative strategic partnerships – or symbiotic relationships as Patricia Hewitt called it – to the benefit of both firms. 

    PBR measures

    1. Enterprising attitudes are necessary in both established firms and new businesses. We need an enterprising culture which reflects the attitudes across society – attitudes to risk, reward and failure, and wealth creation.
    2. In the 1999 Budget we set out our intentions for a new tax incentive to promote corporate venturing. Following consultation, Gordon Brown announced on Tuesday in the Pre-Budget Report that we will provide an up-front corporation tax relief of 20 per cent for all large companies that invest in growing companies for over 3 years. This underwrites one fifth of their investment and takes into account the needs of Britain’s small high-tech firms.
    3. But we don’t just want companies to invest through corporate venturing once, we want them to become serial corporate venturers. Your report drew some interesting conclusion about the success of corporate venturing. 80 per cent of alliances were still going forward. 50 per cent of firms had gone on to undertake further partnerships.
    4. So our measures go further.
    5. To encourage serial corporate venturing, if a corporate venturer sells its investment at a profit and reinvests again through corporate venturing, it can defer the corporation tax charge on the gain.
    6. This incentive could be worth up to £100 million if businesses rise to the challenge and invest £500 million through corporate venturing .
    7. A thriving enterprise economy calls for a larger number of small businesses. That is why the Pre-Budget Report contained a number of new incentives for small businesses – the backbone of our economy. But we know that investments in smaller higher-risk trading companies are more risky. That is why as part of the corporate venturing tax relief we are providing a capital write-off against income for investments that do not work. Depending on the loss, a corporate venturer will be able to get additional relief of up to £24 for every £100 it has invested.
    8. These tax relief measures provide strong financial incentives to undertake corporate venturing. But, I agree with Patricia that corporate venturing is about more than money. So we will continue to work with the Department of Trade and Industry, developing further non-tax measures to help create a corporate venturing culture.
    9. Your research found that 38 per cent found partners through informal Networks. While I was in Silicon Valley I went to a meeting of the MIT/Stanford Venture Lab. This is a public forum where entrepreneurs, managers and investors can meet and learn about the small firms. I hope the CBI’s programme of regional seminars following this report will start the ball rolling in the UK. But we also need to look at other ways of encouraging dialogue between established companies and new firms.
    10. We need to take corporate venturing into the boardrooms of the largest corporates and into the workshops and laboratories of our smallest firms. We must get the message across that corporate venturing can provide finance, support and technical expertise to turn innovative talent into commercial success.

    Conclusion

    1. Corporate venturing has been a mainstream in the US economy since the 1960s and has had a big impact on the shape of their economy. Let us now grasp this opportunity to make corporate venturing a success for British businesses as well.
    2. Thank you.
  • Stephen Timms – 1999 Speech at Launch of Management Consultancy Best Practice Statement

    Stephen Timms – 1999 Speech at Launch of Management Consultancy Best Practice Statement

    The speech made by Stephen Timms, the then Financial Secretary to the Treasury, on 10 November 1999.

    Introduction

    1. I am delighted to launch this Statement of best practice working relationships between Government and the key consultancy associations. The Statement is a clear demonstration of this Government’s intention to work more closely and more effectively with its suppliers. I would particularly like to welcome the three parties who have worked so hard together to get this far: The Management Consultancies Association (represented by Chris Harrison, Vice Chairman), The Institute of Management Consultancy (represented by Richard Popple – President) and the Treasury’s Procurement Group (represented by Mike Burt).

    Procurement

    1. Improving procurement is part and parcel of this Government’s wider modernisation programme for the public services. Central Government is the largest buyer of goods and services in the country. Our procurement budget totals £13 billion, and that includes half a billion pounds a year spent on consultancies. So there is a lot at stake.
    2. The need for change has been given new urgency by the rapidly changing nature of the public sector’s relationship with the private sector.
    3. The Government’s dealings with the private sector have increased both in number and in complexity so the Government’s procurement activity has also become more complex.
    4. Take for example the enormous investment process that is now underway in IT. Or the opportunities posed by the Internet and electronic commerce, for organising Government activities in new, innovative and more effective ways. All of these changes demand a new emphasis on professional procurement and a new approach to it too.
    5. The private sector recognised long ago that procurement processes and procedures were central to the strategic planning and policy of any organisation. The public sector should be no different. Indeed without change in the public sector there will continue to be adverse consequences for the private sector, not least for the suppliers and consultancies with whom we do business.
    6. The problems in Whitehall’s approach to the procurement of committee projects and our procurement are well-known – poor projects definitions, poor project management, poor contract management and poor management of suppliers.
    7. We have also had some nasty surprises. There have been a number of major projects both in fields such as construction and IT which quite frankly have simply gone wrong. They raised the question as to whether the public sector had the professional skills required to define and manage major capital projects of this sort.

    Office of Government Commerce

    1. That’s why towards the end of last year we asked Peter Gershon, Managing Director of GEC Marconi to conduct a review of the structure of procurement and to tell whether we had the organisation, the skills, the processes and procedures that would see us into the next Millennium. His report which we endorsed in July, provides a recipe for swift progress.
    2. The report recommended the setting-up of the Office of Government Commerce which will, on the principle of subsidiarity, support departments by doing things centrally that are best done centrally, while leaving individual units freedom to pursue their individual interests locally where it is clearly best to do so.
    3. The Office of Government Commerce will be responsible for defining the electronic procurement agenda. It will oversee the management of supplier relations and it will be a source of project management skill which will be world class and which it will make available to departments. It will be a single source of authoritative guidance and will manage up the skills available across Whitehall. 

    Best Practice Statement

    1. This Statement is one of the first practical demonstrations of this Government’s commitment to improving its relations with its suppliers, as set out in Peter Gershon’s procurement review. It also puts into practical effect the call by the Modernising Government White Paper for modern and effective Government business. This is the first statement of its kind and I believe can be the model for other expressions of best practice relationships.
    2. It is a clear expression of how client departments and consultants should work together to achieve a mutually beneficial relationship and outcome. It sets out the best practice standards which should be adopted at every stage of the procurement and delivery of the contract. It reflects the real need for both sides of the contract to put behind them the confrontational and adversarial approaches which have too often been a feature of past working relationships and which deliver neither value for money nor the best results for either side, nor ultimately for the taxpayer.
    3. I bring a good deal of conviction to the task of commending the Statement because of my experience of working as a management consultant. I knew well the potential for management consultancy to make an enormous contribution to problem solving in a creative way – but also how much achieving that potential is dependent on a good relationship between client and consultant.
    4. We have developed the Statement with other Government Departments, the Management Consultancies Association and Institute of Management Consultancy on behalf of their members. But if it is to have real impact, its principles must be disseminated to everyone in Government involved in procuring consultancy services and to every consultant employed to deliver those requirements. And I look to everyone present here today to play their part in making this happen. We also recognise the need for its adoption and application to be monitored and fed back to those who will be responsible for reviewing, amending and refining the statement. So we will be putting in place the means for achieving this
    5. Working together with business has been a key theme of this Government. This Statement clearly demonstrates those values. Consultancies, the Government and the taxpayer all stand to gain. With your support, we can ensure that the Statement delivers tangible results, becoming the “yardstick” for modern procurement practices across the UK.
    6. Thank you.
  • HISTORIC PRESS RELEASE : Competition and regulation in Financial Services Markets [November 1999]

    HISTORIC PRESS RELEASE : Competition and regulation in Financial Services Markets [November 1999]

    The press release issued by HM Treasury on 9 November 1999.

    Don Cruickshank today welcomed the Government’s response to his Banking Review Team interim report, ‘Competition and Regulation in Financial Services: Striking the Right Balance’, published on 22 July.

    Commenting on Economic Secretary Melanie Johnson’s announcement of the Government response to recommendations in his interim report, he said:

    “I welcome the changes the Government proposes to make to the Bill to ensure that markets in financial services are subject to effective competition scrutiny, and that the right balance is struck between the FSA’s regulatory objectives and effective competition.

    “I made six, quite detailed, recommendations in my Interim Report. For five of them the Government’s proposed changes to the Bill meet the substance of my recommendations. In its proposals for external scrutiny the Government has gone further, and proposed a reporting procedure which will make the FSA’s assessment of competition transparent.

    “My sixth recommendation was that the FSA should be responsible for making the trade off between regulatory and competition outcomes in financial services. I proposed that this should be achieved by giving the FSA a primary competition objective to minimise the anti-competitive effects of its regulatory activity.

    “The Government believes that this outcome can be achieved without giving the FSA a primary competition objective in addition to its regulatory objectives. My concern has always been that the outcome should be as Ministers intend. I am not wedded to any particular means of achieving this, and I will welcome any changes to the Bill which deliver the outcome in practice.”

    “Work on the review of banking services is continuing and I look forward to reporting to the Chancellor early next year.”

  • HISTORIC PRESS RELEASE : Chancellor Gordon Brown welcomes launch of Nasdaq-Europe [November 1999]

    HISTORIC PRESS RELEASE : Chancellor Gordon Brown welcomes launch of Nasdaq-Europe [November 1999]

    The press release issued by HM Treasury on 5 November 1999.

    The choice of London as the location for NASDAQ-Europe is excellent news for the City of London and for the wider economy said the Chancellor Gordon Brown today.

    The Chancellor was speaking this morning following a meeting with NASDAQ and its partners where they told him of their decision to launch a joint venture to create a pan-European securities market.

    The Chancellor said:

    “The City of London is one of the largest and most highly regarded financial centres in the world. It thrives on competition and innovation and offers an extremely attractive environment for internationally mobile financial services businesses.

    “NASDAQ’s decision to locate its European exchange here represents a massive vote of confidence in the City. NASDAQ-Europe will strengthen the UK financial services industry and reinforce London’s position as one of the world’s top international financial centres.

    “And NASDAQ’s presence here will be good for the wider economy too, not just in the UK but Europe as a whole. Job creation and economic growth depend on efficient capital markets channelling funds to businesses to finance their expansion. This is more than ever true in the Internet economy.

    “NASDAQ has a tremendous record of raising capital for growth companies as well as being an innovative and entrepreneurial business in its own right. I therefore very much welcome NASDAQ’s decision to set up its pan-European stock exchange in London.”

  • HISTORIC PRESS RELEASE : Chancellor launches Techmark [November 1999]

    HISTORIC PRESS RELEASE : Chancellor launches Techmark [November 1999]

    The press release issued by HM Treasury on 3 November 1999.

    The London Stock Exchange’s new technology market – Techmark was launched today by the Chancellor Gordon Brown.

    Techmark will be the London Stock Exchange’s ‘market within a market’ for innovative technological companies. It aims to meet the investment requirements of technological companies already listed on the LSE main market and those who may be thinking about flotation.

    Welcoming the launch of Techmark, the Chancellor said:

    “I welcome the launch of Techmark – a new market for the new generation of dynamic entrepreneurs whose success depends on innovation. It is designed to meet the unique needs of technology companies – from those already listed on London’s markets to those thinking about a flotation.

    “Bringing together companies with a shared commitment to technological innovation, Techmark emphasises the importance of new technology. And by including FTSE fledgling companies alongside FTSE 100 companies, it recognises that the new companies of today can be the leading companies of tomorrow.

    “So with the launch of Techmark, new growing companies have a quicker route to the main market and wider access to the investors on which their growth and success depends.”

  • HISTORIC PRESS RELEASE : Clarifying market abuse in Financial Services Government responds to consultation [November 1999]

    HISTORIC PRESS RELEASE : Clarifying market abuse in Financial Services Government responds to consultation [November 1999]

    The press release issued by HM Treasury on 2 November 1999.

    Important amendments to achieve greater clarity and certainty in the definition of market abuse in the Financial Services and Markets Bill currently before Parliament were announced by Economic Secretary Melanie Johnson today.

    The government amendments, agreed by the Standing Committee on the Bill, will :

    • introduce additional protections for those who:
    • take care not to commit market abuse
    • reasonably believe that their behaviour is not abusive
    • act in conformity with FSA rules, eg on price stabilisation.
    • make it clear that behaviour can only be penalised if it is not in accordance with what a regular user of the market would reasonably expect.

    Miss Johnson said:

    “Market abuse is bad for the markets and bad for the UK economy. We are determined to be tough on abusers. The action we are taking in the Financial Services and Markets Bill is essential to protect the integrity of UK financial markets. This is in all our interests.

    “We have listened carefully to concerns about the need for the Bill to be as clear and as fair as possible, including the views of the Joint Committee under Lord Burns. These amendments reflect close consultation with the industry and market experts and also the recommendations of the Joint Committee. The changes make sure that people can only be penalised for market abuse when their behaviour fails to meet what a regular user of the market would consider to be expected market standards.”

  • HISTORIC PRESS RELEASE : Enterprise – A vital force against social exclusion [November 1999]

    HISTORIC PRESS RELEASE : Enterprise – A vital force against social exclusion [November 1999]

    The press release issued by HM Treasury on 2 November 1999.

    Encouraging enterprise has got a vital role to play in generating jobs and helping to build stronger communities, Stephen Timms and Patricia Hewitt said today.

    They were speaking at the launch of a new report, Enterprise and Social Exclusion, produced by Policy Action Team 3, in response to the Social Exclusion Unit’s publication last year on deprived neighbourhoods.

    The report sets out a new agenda for Government, banks, business support agencies and others to link enterprise and regeneration – through better advice and access to finance, and more support for a culture of enterprise.

    Stephen Timms, Financial Secretary to the Treasury and Champion Minister for the PAT, said:

    “We need more new and successful businesses in our least well off communities. People who have a business idea, and want to make a go of it, need to get the right support to give them the best chance of success. And existing firms need to be able to get advice and finance to help them prosper.

    “This report sets out an ambitious agenda to promote enterprise as a force against social exclusion. It recognises that not everyone will have the skills or aptitude to run a business. But everyone with the potential to succeed needs to be given the opportunity to do so.

    “There’s more that can be done by all the parties with a stake here to
    give enterprise in deprived areas the attention it deserves – and the report makes some clear proposals. Some recommendations have already been implemented, and we’ll be looking closely at the rest. Much of the work going forward will fall to DTI, and I know Patricia Hewitt is relishing the task.

    “I see this report as a contribution not just to the debate on social exclusion but also to the Government’s broad agenda for an enterprise society. Enterprise is an outlook, an attitude of mind, that needs to be encouraged right across society, and the proposals here are about one facet of that broader task.”

    Patricia Hewitt, Minister for Small Business at the DTI, said:

    “The job of the SBS is to provide top class support to start-ups and SMEs right across the country. That must include our most disadvantaged communities.

    “There is just as much entrepreneurial potential in the poorest council estates as in the wealthiest suburbs.”

    The key recommendations are:

    Better support for enterprise

    • the new Small Business Service should promote enterprise in deprived areas, as part of its remit to promote small business;
    • Business Links should develop plans with others to support enterprise and business growth in deprived areas;
    • incubators should be encouraged – they can add real value in building successful businesses;
    • Regional Development Agencies should advise the SBS on regional priorities, and ensure regeneration programmes give real weight to developing enterprise.

    Better access to finance

    Steps to promote innovation in getting finance to enterprise in deprived communities:

    • a national challenge fund to provide capital to community finance initiatives – who act as a bridge between mainstream institutions and entrepreneurs in deprived communities
    • access to the Government’s loan guarantee scheme, on an experimental basis, to encourage commercial lending to community finance initiatives

    Removing barriers

    • social enterprises to be recognised as a group of businesses deserving support
    • self-employment is a valid route from benefits to work, and should be recognised as such
    • Government to promote involvement of mainstream businesses in deprived communities.

    Two recommendations have already been agreed:

    • Patricia Hewitt announced on 20 September the creation of a national network of volunteer business mentors, funded by DTI;
    • the Bank of England has agreed to monitor the provision of finance for business in deprived groups and communities, and to report regularly on this.