Risk takers need Whitehall help with public image
By Graham Redfearn
Entrepreneurs who operate within the informal economy need more government support to help them become legitimate, a report is set to recommend.
The study by Street UK, a community development finance institution, and Community Links, a social action centre in east London, says there is a general perception that people working in the informal economy are ‘benefits cheats and tax dodgers’ as opposed to enterprising individuals providing valued local services but needing support to enable them to move on.
The authors call for a shift in the balance and argue that there are ‘too many sticks and not enough carrots’ to enable people to escape the benefits trap.
According to government figures from 1999, the informal economy is worth around £14bn a year and is more prevalent in disadvantaged areas.
But the report, Self-employed people in the informal economy – cheats or contributors? -says micro-entrepreneurs operating informally want to become small bankable businesses.
Street UK founder and director Martin Hockly said: ‘These are people who have no real way into the formal economy and are just doing what they can to get by – these are decent people, providing services in communities that otherwise would not be there.’
The report, to be published in September, recommends the introduction of tailored business advice and the streamlining of the tax and benefits systems. It also urges the government to give a cabinet member responsibility for moving the informal economy up the political and parliamentary agenda, and says entrepreneurs themselves should be at the heart of decision-making.
A Department of Trade and Industry spokesperson said: ‘The government is committed to encouraging as many people as possible to start up their own businesses. ‘People who want to start or have started their own legitimate business can receive a significant amount of support and advice from Business Link, the DTl’s business advice service.’
Source: New Start magazine