PRIME Initiative

More details are emerging of the Conservative/Liberal Democrat Coalition’s policy on issues that affect employment creation and the encouragement of new businesses. Here’s a round-up based on what’s been said in important ministerial statements today. I also include some words said before the election by the winning side that still seem to be relevant.

The official statements 24 May 2010

Jobs and Welfare
http://programmeforgovernment.hmg.gov.uk/jobs-and-welfare/

Key points seem to be: a new “Work for Yourself” programme to encourage self-employment with loans and mentoring, new locally-based Work Clubs for conventional job seekers, and a promise of faster access to back-to-work programmes for those facing the biggest barriers.
On the last point, currently those unemployed and over 50 normally have to wait at least six months before getting on a government-sponsored self-employment programme.

Business
http://programmeforgovernment.hmg.gov.uk/business/

No real detail here, but several interesting commitments. Some (unspecified) RDAs are likely to be replaced by local authority-led “Local Enterprise Partnerships”, the IR35 self-employment tax ruling will be replaced with something less hostile to genuine small businesses, and more government tenders will go online with an “aspiration” that 25% of government contracts will eventually go to small and medium-sized businesses.

Detail on corporation tax rate changes that could well affect older entrepreneurs wanting to sell up to move into retirement are still to come.

Pensions and Older People
http://programmeforgovernment.hmg.gov.uk/pensions-and-older-people/
The default retirement age will go, while the state pension age probably will increase to 66 - but not before 2016.

Conservative position before the election

“Our ‘Work for Yourself’ programme will help move people into self-employment. We will build a network of business mentors and offer substantial loans to would-be entrepreneurs, supporting self-employment and franchising as a route back into work. We will work with specialist organisations that already have a proven track record in this area, like the Prince’s Trust and the Bright Ideas Trust, to offer the best support.”

For getting workless people back into ordinary jobs (as opposed to their own self-employed businesses) the Conservatives were talking about a mixture of “Service Academies” for particular employment sectors and small locally-based job clubs. This ideas still seem to be going forward, but no new detail has emerged.

Future of RDAs

While the Conservatives have long been sceptical about the value of England’s nine Regional Development Agencies in promoting prosperity and economic growth, the man who now has the top job at the department that funds them is Liberal Democrat Vince Cable, 67.

But he wasn’t a great fan of the RDAs either. Before the election he explicitly questioned the value of having them at all in the South East and the East of England, but suggested they might have role where structural unemployment is still a problem.

The form of words used in today’s statement suggests RDAs could possibly survive in areas where they can show they are popular - and in particular if they are supported by the local authorities in their region. But that the presumption now is that many will go.

In England local authorities are elected by the people. The big weakness of the RDAs is that despite spending large amounts of tax payers money they are not elected, and with the single exception of the London Development Agency they have very little democratic accountability.

So with spending cuts now a priority they have few allies to defend them. It seems local authorities will increasingly take over any functions that are deemed worth keeping.

This will move England closer to the Scottish position, where the elected local authorities already take on more business promotion and economic development functions.

Most relevant new ministers

DWP
Secretary of State for Work and Pensions – Rt Hon Iain Duncan Smith MP
Minister of State – Chris Grayling MP
Minister of State – Steve Webb MP
Parliamentary Under Secretary of State – Maria Miller MP
Parliamentary Under Secretary of State (Minister for Welfare Reform) – Lord Freud
(What do they all do? More details may be posted on the DWP site later:
http://www.dwp.gov.uk/about-dwp/ministers/ )

BIS
Secretary of State for Business, Innovation and Skills – Dr Vincent Cable MP
Minister of State – Mark Prisk MP

Other relevant departments
Secretary of State for Communities and Local Government – Eric Pickles MP
Secretary of State for the Home Department and Minister for Women and Equalities – Rt Hon Theresa May MP
Secretary of State for Education – Michael Gove MP