Griffiths' enterprise culture plan at risk from 'stumbling blocks'

The Professional Contractors Group (PCG) has warned Nigel Griffiths, Minister for Small Businesses, to clear existing stumbling blocks, such as IR35, out of the way if his latest proposals to support first-time UK entrepreneurs are to have any real effect.

Mr Griffiths' latest package of measures to support small businesses and entrepreneurs as part of his wider 'enterprise culture plan' includes:

• a 'starter pack' for all prospective entrepreneurs to make it easier to understand what assistance they can get and what they need to do when setting up in business;
  
• increasing the numbers of new businesses seeking advice as well as improving the standards of business advisors;
  
• setting up a National Policy Forum for Start-Ups to improve coherence of delivery, ensure services meet customer needs, and review existing initiatives; and
  
• improving access to business information on the internet.

The Small Business Department's decision to provide the package was influenced by survey results from the Global Entrepreneurship Monitor, a research program that annually assesses different nations' levels of entrepreneurial activity.

The monitor estimated that fewer than eight per cent of working age people are actively involved in running a business in the UK, compared to 12 per cent in the United States.

It also found that men are over two and a half times more likely to be entrepreneurs than women in the UK, while a lower proportion of both the Asian and black community are in business (16 per cent and 12 per cent respectively) than the white community (18 per cent).

Mr Griffiths said: "We're determined to create a culture of enterprise where entrepreneurs from all walks of life are given the skills and confidence to put their ideas into practice.

"The UK is already one of the easiest places to set up in business. But finding information or sources of help and advice and complying with regulations can often seem complex. A starter pack will make things less complicated.

"We're also keen to increase the take-up of business advice, as it can make a big difference to success or failure. We're going to drive up the quality and relevance of advice to make more businesses consider using it, and the National Policy Forum will help us achieve this."

Richard Robson, a PCG Director, said: "Whilst the PCG would back any sincere Government initiatives that make it easier for entrepreneurs and small businesses to start up, many issues remain in their path. This has the potential effect of cancelling out the intended benefits of such initiatives for particular business groups, including many of our members.

"Stumbling blocks like IR35 can stop genuine entrepreneurs who provide their unique services to clients from even starting out in business in the first place. Consequently, small businesses in the UK that could grow to be tomorrow's large companies are being stopped in their tracks. Hence, while initiatives like this may be well-intentioned, they will not do much to help the sort of entrepreneurs we represent until the road ahead is cleared."