Jobless to get help for own businesses

Unemployed people will get more Government help to start their own businesses under plans to move Britain "from recession to recovery" to be set out by ministers next week.

The jobless will receive up to £800 tax-free and intensive support and advice on how to become self-employed as soon as they sign on the dole under a new drive to bring down unemployment as soon as possible after the recession ends. There are growing signs that many women are starting their own businesses from home. The extra cash will be announced in a "Back to Work" White Paper published alongside the Chancellor Alistair Darling's Pre-Budget Report a week tomorrow.

At present, people have to be out of work for six months before qualifying for a £50-a-week self-employment credit for 16 weeks to bridge the gap between the dole and an income from their new business. The six-month gap is seen as a deterrent and ministers believe that more of the jobless would start their own firms if they could get state help from day one.

Yvette Cooper, the Work and Pensions Secretary, told The Independent: "More and more people are interested in starting up their own business. If we can make it easier for people who are unemployed to try self employment that's good for them and good for the economy too."

She decided to change the system after meeting women in her Pontefract and Castleford constituency who were keen to become self-employed but were worried that their redundancy money would have run out in six months.

Ministers claim the £5bn anti-recession package has helped the jobless find work more quickly than in previous recessions.