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The looming crisis of unemployment calls for an emergency response

February 6, 2021

By Lord Young, President of the Campaign for Economic Growth

Up until now, Covid and its effect on the nation’s health and economy has taken centre stage and been the sole focus of government efforts, but thanks to the brilliant work of Kate Bingham and her team securing vaccines we are soon going to be set free to go back to work. As we step hesitantly back into the daylight, we are going to find a very changed economic landscape.

Unemployment will soar given that many small firms, through no fault of their own, are facing or have already faced bankruptcy. Many medium-sized businesses will also be fighting for survival, reducing overheads and letting people go. Even large companies will be looking to their reserves.

This will not be the first time that we have faced a great surge of unemployment.  Throughout the whole of the eighties unemployment was one of the major challenges of government, but back then we had dying, decrepit industries and we had to painfully restore the spirit of enterprise that had been squashed by the taxation policies of post-war governments of both parties.

I had been an entrepreneur back in the sixties, in an age that knew few, and I was quick to volunteer my services for the first Thatcher government. I spent most of the eighties dealing with unemployment and we found that the entrepreneurial spirit of the British people had not died. We introduced programs like the Enterprise Allowance Scheme, which gave anyone unemployed at that time with £1,000 to invest, an idea and a desire to work for themselves, the right to draw unemployment benefit for year while establishing their company. On that project alone over 350,000 new businesses started and thirty  years later two had made the FTSE100.

We had it again, although happily smaller, after the financial crisis of 2008.  This time it was both quicker and easier to deal with because we were starting from a much better base and we no longer had to persuade people that they had the ability to work for themselves.  

We launched, out of No 10, Start-Up Loans, which gave anybody, of any age, with a business idea, a five year loan of five to seven thousand  pounds and a mentor.  The mentor was important, because I knew that starting a business can be lonely. Latterly the programme was run by the British Business Bank and despite any obvious marketing has helped more than 75,000 new businesses to start.

This time we will be faced with many highly skilled unemployed, who have lost their jobs or their firm, through no fault of their own, but as a result of the nation’s fight against Covid. They need help, and need it quickly, before the pain of unemployment dulls ambition.

If anyone has run a previously successful business, and can produce the accounts to show it, the Government should give them a combination of grants and loans to enable them to restart. Many who were previously employed will see this as an opportunity to start their own business and we should resurrect and bring up to date programs like the Enterprise Allowance Scheme.  

Devising the programs is the easy part – we know what worked in the past and human nature does not change, so we know what will work now. The hard part is delivering them since the Government no longer has a department or structure capable of doing so on a national basis. The Department of Trade and Industry of old has long since gone and although the Department for Business, Energy & Industrial Strategy has a good secretary of state, it no longer has the organisational capacity for delivery.

Government programs are like baked beans, they don’t sell unless they are marketed and marketed well. The best programs in the world are useless unless people know they are available. I used to talk widely about our Action for Jobs plan in the press, on radio and on television and it was an essential part of giving people hope for the future.

What should we do now? Let us take the model of the successful vaccine program.  Let us set up a Task Force and recruit a number of successful entrepreneurs who will work with and guide the civil service on marketing and distributing these programs. Let us call in the banks, who have the ability to distribute and police the loans.

This is a national emergency and deserves a national response. If the Government puts the call out, they will find it will not be in vain.

This article was originally published by The Telegraph

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