Over-50s to get help to launch own businesses

Employment minister hopes enterprise allowances will encourage the jobless to set up small firms

Thousands of jobseekers are to be offered help to start businesses, as ministers try to help over-50s worried they will never find work again. Chris Grayling, the employment minister, wants to "unleash a wave of new entrepreneurs" with enterprise allowances, which mirrors a scheme in the 1980s that helped the artist Tracey Emin, Creation Records boss Alan McGee and Julian Dunkerton, founder of the Superdry fashion label.

The minister, who is tipped for cabinet promotion, also slapped down claims from the Tory backbencher Nadine Dorries that David Cameron and George Osborne were "two posh boys who don't know the price of milk". Mr Grayling said the Prime Minister would not "be blown off track" by calls for a lurch to the right.

The latest unemployment figures will be published on Wednesday. Ministers are hoping for a repeat of last month's fall to counter claims the Government is not acting to tackle rising joblessness. "The Conservative Party has been accused in the past – unfairly, in my view – of not being concerned about unemployment," Mr Grayling said. "It is right at the top of the agenda of what we do."

The enterprise allowance began last autumn and has resulted in hundreds of new businesses being started, many of them small businesses such as joiners, gardeners, fitness instructors, dog groomers or bricklayers. The scheme was intended to run for two years to create 40,000 firms, but ministers hope it will be extended to cope with demand.

"What we're trying to do is unleash a wave of new entrepreneurs," Mr Grayling said. "In those parts of the country where the unemployment challenge is biggest, you tend to find that the private sector is smaller. The only way we are going to address this is by getting new entrepreneurs in business."

Ministers are planning to allow claimants to pitch their business idea after only three months on jobseeker's allowance instead of waiting for six months. Successful applicants are offered a £1,000 loan to buy equipment, such as tools or a computer, and receive a weekly allowance of £65 for the first 13 weeks and £33 for a further 13 weeks. Each start-up is assigned a mentor from the local business community, who can support them in the difficult first month.

Mr Grayling hopes the scheme will help older workers who struggle to find work if they are made redundant. The number of over-50s claiming jobseeker's allowance has doubled since 2008, to almost 260,000. Almost 25,000 people aged 50 to 64 have been claiming it for more than two years, compared with 7,415 in March 2009.

New research from the pollsters Britain Thinks reveals a sharp rise in concern about the impact of unemployment on young people. Of those surveyed, 71 per cent are "worried that there's a generation of young people who may never be able to get jobs because of the recession", up from 63 per cent in December 2010.

Last month it emerged unemployment had fallen by 35,000 to 2.65 million. Mr Grayling admitted the jobs market remains "challenging". But he dismissed calls from some on the right for a change in approach after losing 405 council seats in the recent local elections, insisting that economic growth would revive the party's electoral fortunes.

"I genuinely think that if we are diverted from our course on economic and financial reform, on driving down the deficit, then we will see unemployment higher rather than lower," he said.

"Neil Kinnock used to hammer us in local elections, but it made no difference to the general election result when it came."

Case study: 'I was given a mentor who helped me prepare my business plan'

Lindsay Whitaker, 31, physiotherapist, Rotherham, South Yorkshire

"I was working for Plymouth Albion Rugby Club as lead physio, but was made redundant this time last year. I mentioned to [the jobcentre] that I was thinking about starting up my own practice. I was given a business mentor and he helped me prepare my business plan. I opened my sports injury rehabilitation clinic at the beginning of February. From beginning to end it was a pretty quick turn-around. It was quite exciting, but also a bit of relief to be doing things again. Spending six months not being able to work was quite frustrating. Going from such a physical job to being unemployed meant I got a bit restless, but now it's all starting to take off."

Joe Gammie

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Sales Executive - OTE £35,000

£18000 - £23000 per annum: Recruitment Genius: A Sales Executive is required t...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: £20000 - £25000 per annum + c...

Recruitment Genius: Project Coordinator

£25000 - £30000 per annum: Recruitment Genius: This company provides a number ...

Recruitment Genius: Graduate Sales Consultant - OTE £45,000

£15000 - £45000 per annum: Recruitment Genius: Do you want to work for an exci...

Day In a Page

Solved after 200 years: the mysterious deaths of 3,000 soldiers from Napoleon's army

Solved after 200 years

The mysterious deaths of 3,000 soldiers from Napoleon's army
Every regional power has betrayed the Kurds so Turkish bombing is no surprise

Robert Fisk on the Turkey conflict

Every regional power has betrayed the Kurds so Turkish bombing is no surprise
Investigation into wreck of unidentified submarine found off the coast of Sweden

Sunken sub

Investigation underway into wreck of an unidentified submarine found off the coast of Sweden
Instagram and Facebook have 'totally changed' the way people buy clothes

Age of the selfie

Instagram and Facebook have 'totally changed' the way people buy clothes
Not so square: How BBC's Bloomsbury saga is sexing up the period drama

Not so square

How Virginia Woolf saga is sexing up the BBC period drama
Rio Olympics 2016: The seven teenagers still carrying a torch for our Games hopes

Still carrying the torch

The seven teenagers given our Olympic hopes
The West likes to think that 'civilisation' will defeat Isis, but history suggests otherwise

The West likes to think that 'civilisation' will defeat Isis...

...but history suggests otherwise
The bald truth: How one author's thinning hair made him a Wayne Rooney sympathiser

The bald truth

How thinning hair made me a Wayne Rooney sympathiser
Froome wins second Tour de France after triumphant ride into Paris with Team Sky

Tour de France 2015

Froome rides into Paris to win historic second Tour
Fifteen years ago, Concorde crashed, and a dream died. Today, the desire to travel faster than the speed of sound is growing once again

A new beginning for supersonic flight?

Concorde's successors are in the works 15 years on from the Paris crash
I would never quit Labour, says Liz Kendall

I would never quit party, says Liz Kendall

Latest on the Labour leadership contest
Froome seals second Tour de France victory

Never mind Pinot, it’s bubbly for Froome

Second Tour de France victory all but sealed
Oh really? How the 'lowest form of wit' makes people brighter and more creative

The uses of sarcasm

'Lowest form of wit' actually makes people brighter and more creative
A magazine editor with no vanity, and lots of flair

No vanity, but lots of flair

A tribute to the magazine editor Ingrid Sischy
Foraging: How the British rediscovered their taste for chasing after wild food

In praise of foraging

How the British rediscovered their taste for wild food