Lord Young proposes removing start-up loans age cap

An age cap on accessing taxpayer-funded loans to set up a business should be removed, says the prime minister's enterprise adviser, Lord Young.

His latest report says those over 30 should be eligible for start-up loans.

It is one of several proposals which PM David Cameron said would help "fire up business growth" in the UK.

Other proposals put forward by Lord Young include making it easier for small businesses to bid for £230bn a year of public sector contracts.

Another is the creation of a £30m voucher scheme to encourage firms to get expansion advice.

In his second report to the prime minister - entitled Growing Your Business - former trade and employment secretary Lord Young also suggests a greater role for business schools in the local economy.

'Raise aspirations'

Lord Young's report focuses on micro-businesses - those which have fewer than 10 employees and which make up 95% of all businesses in the UK.

"We have one of the best environments in the world for the creation of new firms," he said.

"What this report endeavours to do is to help and encourage all those new firms to now take on their first employees and grow.

"Growing our smallest businesses would transform our economy - they are the vital 95%.

"If just half of the UK's micro businesses took on an additional member of staff, unemployment would be reduced to almost zero. We need to raise the aspirations and confidence of these businesses and give them the tools to grow."

There should also be better marketing of government schemes to support new and developing businesses, he says.

'Wealth creators'

Hayley Conboy, CBI principal policy adviser for enterprise, said Lord Young had rightly identified that the government "needs to earmark funding to effectively market existing finance and support schemes".

And the British Chambers of Commerce said small firms needed support and encouragement.

Dr Adam Marshall, director of policy at the BCC said: "Small and micro businesses will only be able to fulfil their full potential once measures are put in place to help them access the finance, skills and services they need to grow.

"Lord Young has identified a number of these measures in his report and we are pleased to see him address the problem of access to finance which is still hurting the growth potential of many firms.

"But the focus must now be on getting these proposals off the ground so they can actually make a real difference to the business community, and in turn, drive the economic recovery."

'Out of touch'

However, some have reacted less kindly to remarks in Lord Young's report that a recession is a good time for enterprise.

"The rise in the number of businesses in recent years shows that a recession can be an excellent time to start a business," he states in his report, adding that "factors of production such as premises and labour can be cheaper and higher quality, meaning that return on investment can be greater".

He said GE, Microsoft and Disney all started during a recession.

But Labour Party vice-chair Michael Dugher said: "This is yet more evidence of just how desperately out of touch David Cameron's government has become."

A Downing Street spokesman said the statement that a recession can be a good time to start a business "is borne out by the statistics".

Lord Young, who was employment secretary and later trade and industry secretary under Margaret Thatcher in the late 1980s, resigned his unpaid advisory role in November 2010 after suggesting that low interest rates meant most people had "never had it so good" since the "so-called recession" began. He was reinstated 11 months later.

His first report in his capacity as adviser to the prime minister on small business and enterprise was published in May 2012, and focused on starting a business.