|
HM Treasury News Release
6/00
12 January 2000
Speech by Stephen Timms, MP, Financial Secretary to the Treasury,
at the Art Key Loan Fund Launch, 12th January, 2000
Attached is a copy of the speech made by Stephen Timms at the Art
Key Loan Fund Launch today.
Introduction
I am delighted to be here at the launch of ART_s Key Loan Fund. As
one of the leading local organisations in the country spearheading
community re-investment, ART_s progress is a shining example of just
how valuable and effective community funding can be.
Modern and decent
Let me first set out our hopes for social enterprises in the context
of what this Government is trying to do.
Over the past two and a half years the Government has embarked on
the task of building a new Britain which we want to be modern and
decent - both of those things at the same time. The key economic priority
has been to secure a new stability after decades of boom and bust,
and that has been achieved now in a quite remarkable way. That is
what enables us to articulate a new optimism about the future.
The Chancellor set out in the November Pre-Budget Report four new
ambitions for Britain in the new decade:
*that productivity should rise faster than our major competitors so
that we can start to close at last the productivity gap;
*that we should have a greater proportion of the working population
in a job than we_ve have ever had before and that we should keep it
like that;
*that for the first time over half of school leavers should go on
to study for a degree; and
*that over the decade we should halve the number of children living
in poverty, on the way to the Prime Minister_s goal of eliminating
child poverty altogether in 20 years.
Building on the new stability these are attainable ambitions, consistent
with the vision we_ve spelt out. Modern as well as decent. Enterprise
and fairness - a creative partnership.
These are great tasks that we want to enlist support for on the way
to this modern and decent Britain of the future.
We are determined that Britain should break the closed circle which
in the past has too often restricted enterprise only to the fortunate
few. We won't succeed if we waste the potential of a vast swathe of
our communities, as tragically has been done far too often over the
past 20 years.
Phoenix Fund
As ART_s work demonstrates, locally-rooted partnerships can play a
key role in creating an enterprise-for-all culture and tackling the
exclusion facing people in disadvantaged areas. The skills of the
private sector at its best being applied to some of the problems of
our disadvantaged areas at their worst.
That is why, following the Policy Action Team report on social exclusion
and enterprise which ART contributed to, Gordon Brown announced a
£30 million programme - the Phoenix Fund - to boost enterprise
in disadvantaged areas and amongst disadvantaged groups. As he rightly
said, our poor communities do not need more benefit offices - they
need more businesses creating more jobs.
ART only exists because businesses in deprived communities in Birmingham
often find it difficult to assemble all the skills and raise all the
capital they need to grow. But its not just a problem in Birmingham.
Small businesses, community and voluntary enterprises across the country,
often cannot raise the critical amounts of capital they need to start
or grow towards achieving their potential.
The Phoenix fund will go some way to addressing this. Work on the
fund is at an early stage, but it is likely to include three key elements.
First, support for business. Part of the Phoenix fund will be an enterprise
development fund to promote innovative ways of providing support in
deprived areas. For example, by looking at how to extend the techniques
of business incubation - with managed workspaces and high quality
advice on how to run a business located on the same site as others.
There are very few incubators in the UK aimed specifically at supporting
disadvantaged communities. This compares to the US where 5 per cent
of all incubators are classed as 'empowerment' incubators to support
disadvantaged groups, and many more are used as an integral part of
strategies to re-develop communities hit by economic hardship.
Second, the Phoenix Fund will promote Community Finance Initiatives
such as ART which can act as a bridge between mainstream institutions
and entrepreneurs in deprived communities, through:
*a new national challenge fund for community finance initiatives;
and
*access to the Government's loan guarantee scheme to help them obtain
commercial lending.
Third the DTI is putting in place a national mentoring scheme for
people looking to start up in business. An experienced business mentor
can play a key role in steering a new business to success. By April
2001 DTI aims to have 1,000 business mentors helping around 25,000
existing businesses and business start-ups each year.
Business support
This follows the Policy Action Team conclusion that small businesses
in deprived areas often do not have sufficient access to high quality
business support, such as advice on business planning, and managing
cashflow.
There are lots of agencies and initiatives providing business support
to disadvantaged communities. And in many cases they are doing a lot
of good work. But we need more sense of a strategic framework into
which all this fits. There's too little sharing of experience at national
level, too little sense of what's important, of what works and what
doesn't. And that means too little scope to deliver a step-change
in impact. It's part of Government_s role to help provide a strategic
lead, matched by strong links with local and regional organisations.
That is one reason why the new Small Business Service will be so important
a national agency providing the focal point for small business
issues in Government. Within its wider role to promote small business,
it will have an explicit remit to promote enterprise in disadvantaged
communities.
A more competitive banking sector
Finally, to help promote a competitive and innovative banking sector,
the Bank of England has agreed to report regularly on finance for
business in deprived groups and communities.
This will build on the work that the Bank has been doing over the
past seven years on finance for small firms in general.
Conclusion
As the Prime Minister stated in his New Year message, our goal is
to create a nation where fairness and enterprise go together. The
choice posed in 20th Century politics between economic competence
on the one hand and social justice on the other needs to be consigned
to the history books of the last Century, not carried over into this
new one.
That is why, building on the measures in the Pre-Budget Report, the
Government will be supporting the National Campaign for Enterprise
in Spring this year. The campaign will help to create a more entrepreneurial
culture across the UK by transforming attitudes, developing skills
and encouraging the formation of new and successful enterprises.
Enterprise is vital force against social exclusion. It provides jobs
and services in places that lack both - that alone is very important.
But it also helps to build self-confidence, independence and pride
in the lives of local communities and the individuals who live there.
I have seen I_ve seen this from close quarters in my own constituency
in East London.
ART_s Key Loan Fund has the potential to achieve a great deal, not
only for businesses across Birmingham that obtain funding through
it, but also for the individuals and communities touched by the businesses.
I wish ART every success with the Fund. Thank you for the opportunity
to join you today.
|
