Doug Richard: Unshackle the entrepreneurs... and let cities like Hull ride out recession

Hull has a strong industrial heritage but has suffered greatly at the hands of changing industry, coupled with a difficult economic climate.

The rise in the number of unemployed seeking job seekers allowance in Hull since February 2008 is almost double that of the rest of the UK.

However, the increase in the number of business start-ups in the city is currently above the national average. Rates of entrepreneurialism correspond with strong economic performance so, clearly, it is these start-ups which hold the key to Hull's future economic stability.

Through School for Startups, we are focused on helping to liberate the UK's entrepreneurial talent and we are delighted to be speaking at the University of Hull today.

It is clear that the city must harness its entrepreneurs to stimulate economic recovery and the same is true for the nation as a whole. There are

4.4 million small business owners and entrepreneurs in the UK and these individuals, who are prepared to take on the risk of starting a new business, need support.

In the Entrepreneurs Manifesto, published last month, I wrote that entrepreneurs must move up the list of national priorities and a radical overhaul of the government business support structure is required.

Given our urgent need for economic growth right now, the current time it takes to comply with government regulation is insane. The regulatory burden is stifling the economic endeavour of a section of society who could be pivotal in lifting the UK out

of recession.

More than one third of all spending by regional development agencies on small business support is lost to administration and the evidence of its impact is dubious.

There is a need to redistribute all government support from ineffective business support activities to direct credits for angel and family investment in small businesses. The subsequent savings would leave a much simplified and slimmed-down support structure to fund tax breaks for a new generation of start-ups and apprenticeship programmes which would train the next generation and guarantee employment rather than subsidising the unemployed.

Recent research has shown that Hull is below the national average for education results but there is evidence to suggest these are improving. This is encouraging, but action is still required to engage those who are leaving school and create opportunities for them.

Last month's Prince's Trust study showed 15 per cent of young people across the country feel their life lacks direction, and this figure rises to 42 per cent for those out of work. Hull must avoid creating a jobless generation of young people, which would have an enormous impact on the city's economy and productivity.

By opening the door to entrepreneurialism and encouraging the young to

get involved in start-ups, Hull has a real opportunity to help those who are bearing the

brunt of the recession and by doing so, avoid adding to the rising levels of unemployment

in the city.

In addition, the UK Government must set aside a specific portion of its procurement budget for small business. The Yorkshire and Humber region hosts 313,820 businesses, of which 99.1 per cent employ fewer than 50 employees and as such are classed as small businesses.

Small businesses generate the wealth, employment and opportunity in our cities so it goes without saying that this sector should be nurtured, rather than wrapped in red-tape.

Given that it is the largest consumer in the nation, it is shameful that the Government does not mandate purchasing from small business. What is for sure is that a loosened money supply, unaffordable promises and government-purchased jobs will not save our economy.

The legal structures surrounding social enterprises should also be liberalised to assist more start-ups to help solve social issues.

Politicians should use the opportunity of a looming General Election to champion entrepreneurship at the heart of the economy and recognise the potential of social enterprise as a pathfinder out of recession.

Hull must be commended for taking steps to support its entrepreneurs. The launch of a new student-led Enterprise Club at the University of Hull complements the recently opened, award-winning Enterprise Centre. Hull is also well placed to support its growing pool of entrepreneurs through forward thinking organisations such as

Yorkshire Forward, Hull Youth Enterprise Partnership and

the Graduate Entrepreneurship Project.

Hull, and the nation as a whole, has everything it needs to capitalise on the opportunities of the 21st century.

However, national government must unshackle the only

means of increasing wealth and social mobility: the entrepreneurial culture.