Young Entrepreneurs

Justin Tomlinson Excerpts

Wednesday 18th April 2012 Westminster Hall

[Justin Tomlinson (North Swindon) (Con)]

I called for this debate on encouraging young entrepreneurs in order to focus our support for business on the next potential generation of wealth creators. During my time as an MP, I have focused much effort on supporting businesses. That is based on my experience of owning my own company and the regular business and retail forums that I organise in Swindon. I myself was a real wheeler-dealer when I was at school—if someone needed football stickers, comics or school lockers, I was their man. I want that type of young entrepreneurial flair to be promoted and supported.

I note that in the debates on business and enterprise, we often do not focus on encouraging young people to consider, as a career path, setting up their own business. When I go round talking to young people in schools and colleges, I find that they are incentivised by incredibly popular television programmes such as “The Apprentice” and “Dragons’ Den”. When I ask them to put their hands up if they would be interested in setting up their own business, the hands shoot up. In many ways, that is the perfect time for people to start their own business. Once people are a bit older and have children and a mortgage, they have a lot to lose. For a young person with a good idea, often the worst that can happen is that they will blow their savings.

When hands are thrust up into the air enthusiastically to show that those young people are keen to follow in the footsteps of those they have seen on “The Apprentice” and “Dragons’ Den”, I ask a follow-up question: “How many of you will take this up as a career?” Immediately, the hands go down, there is a deafening silence and tumbleweed rolls across the room. I ask why that is the case and it transpires that they simply do not know how to turn those ideas and that enthusiasm into setting up a business. It is crucial that we change that, because just over 1 million 16 to 24-year-olds are unemployed and 25% of graduates cannot find work. Many of the graduates who do find work do not necessarily use their degrees; they do not necessarily work in the areas in which they gained their qualifications. In addition, we as a nation are seeking to rebalance the economy.

Those are clear reasons why we should be supporting young entrepreneurs. I am delighted that the Government are right behind that. The decision to create 40,000 business mentors is key. I will come on to that. We have also had the exciting announcement of the £10 million pilot of an enterprise loan scheme that will give young people access to finance in a similar way to the student loan concept.

[David Simpson (Upper Bann) (DUP)]

I congratulate the hon. Gentleman on obtaining the debate. I remember well starting my own company some 32 years ago. I do not claim to be a wheeler-dealer like the hon. Gentleman; nevertheless, we managed to succeed. Does he agree that although it is important to encourage young entrepreneurs, we need to get to grips with the issues of financing young entrepreneurs and the bureaucracy and form-filling that they have to go through, which puts many young people off?

--- Later in debate ---

[Justin Tomlinson]

I thank the hon. Gentleman for his intervention and for being someone who took the plunge and set up his own business. I will say that when I was at school, not all my businesses went according to plan. A thriving comic business was thwarted when my friend William’s yoghurt pot exploded in his bag, destroying our entire back collection of comics, so we do not always succeed. The hon. Gentleman is right, and I want to focus later on some of the ways in which we can help people.

With regard to schools and colleges, I want as many schools as possible to encourage entrepreneurial opportunities. That can be done in a variety of ways. For example, there are a number of courses that schools could offer students. Those courses include the ifs School of Finance certificate and diploma in financial studies and the finance baccalaureate being piloted at King Edward VI college in Stourbridge, backed by the Royal Bank of Scotland. They are examples of where young people can do courses to encourage entrepreneurial flair. In some schools, that could be an appropriate way to encourage it.

We should also get schools to embrace the opportunities given to them by the fantastic young enterprise scheme. That gave me my first proper taste of running a business while I was at school. I understand that 250,000 students a year have the chance to try their hand at making money. I want to encourage every school possible to take that up and give their young people that brilliant opportunity. We should give students the chance to do that and we should also support them by getting lots of mentors who are connected to the school to support the young enterprise scheme. For example, a simple letter could be sent to all the parents saying, “Are any of you business people? Can you come and help with the young enterprise scheme?”

[Anne Marie Morris (Newton Abbot) (Con)]

I entirely endorse what my hon. Friend is saying about the need for support and for mentoring. Is he aware of the work that NACUE, the National Association of College and University Entrepreneurs, is doing? With regard to the point that he is making about schools, does he agree that similar support needs to be provided as people exit schools? This issue should not be considered only when young people are leaving universities and colleges. The concepts of mentoring, advice and business incubators should be considered at school, not just at university.

[Justin Tomlinson]

I thank my hon. Friend for that very helpful intervention. I will refer to that organisation later, but she is spot-on, because what I will talk about in relation to universities can be replicated to boost the young enterprise scheme.

I have seen a number of young enterprise schemes in action—partly when I was a student myself, but also while visiting schools and colleges since becoming an MP. I have only one slight issue with some of the schemes that I see. They are set up so that young people raise money from their friends. They sell goods to their friends—they know what their friends want to buy—and they sell them in their friends’ environment. That means that they can cash in a favour, as it were. They can say, “Look, I’ll go to the cinema with you on Friday if you’ll buy my T-shirt off me today.” That is great, but I want young people to have more real-life experience, so I have struck up a deal in my constituency with the Blunsdon indoor market. That is a challenging market environment in which price is key and the customers are very savvy about haggling.

New college, in the South Swindon constituency, which many of my local students attend, is involved. The young people will take their young enterprise business and have three days of trading—a Wednesday, Saturday and Sunday. They have to comply with strict rules. If they have not set up their pitch by 9 in the morning, they lose that day’s trading. They get only a table, so they have to dress that table up, but of course if they get too carried away with that, they will have no money left and will not make a profit. They have to do research to see which products are already being sold, where the gap in the market is and what they can do. They have to stand on their own two feet—and trade on their feet all day long. They have to be able to do mental arithmetic, because the customers will haggle. This is something in which the local media are particularly interested. I am delighted to say that the market will then identify the businesses that do well and say to them, “You can come back in the summer holidays at a discounted rate.”

That scheme could be the first door opening to young people starting their own businesses. The owner of the Superdry clothing company started on a market stall and is now turning over £165 million a day. The Mary Portas high street review said that every town centre should have market stall days, although there are not enough market stall traders. I have now asked Swindon borough council to identify which retail premises in the town centre it cannot lease out at the moment in order to look at giving short-term leases to allow young entrepreneurs just to dabble. Those types of short-term contract can always be found in office blocks. People pay a little more rent, so they would do it only short term, but it enables them to test the water. We need to see the same in retail. I hope that the concept involving New college and Blunsdon market will be a success and provide a model for others to follow.

Turning to universities, I did a business and marketing degree. There were 350 of us and, to the best of my knowledge, I am the only one of those 350 who went on to set up their own business, which ultimately employed people, which is what this country needs. That is in part because 29 of the 30-odd modules that I did focused my mind on how to be good on the corporate ladder. My work placement year was spent in the corporate environment. Entrepreneurial risk taking and flair was in a way educated out of me.

On that point, my old university was Oxford Brookes and I am delighted to say that having met some Virgin Media pioneers—I will say more about them later—they showed me some of their peer-to-peer mentors and I stumbled across Rebecca Hunter, the vice-president of the Oxford Brookes society for entrepreneurs. This scheme has been set up at a number of universities across the country by NACUE, the organisation highlighted by my hon. Friend the Member for Newton Abbot (Anne Marie Morris). It is a fantastic scheme. I spoke to Rebecca last night and asked her how it works. She told me that there are 3,000 people on the mailing list at Oxford Brookes university and 600 people attended the events last year. It is about business mentors coming in and giving people practical advice. The best part is that a number of the students involved in the society are already operating their own businesses. Some are doing so to pay for their university costs and some are setting themselves up for their lives post university. That is absolutely fantastic, and I would urge as many universities as possible to make time available for these things and to encourage people to do them. When it comes to the work-placement years, we should look at how students can run their own businesses, rather than simply be a marketing assistant in a sandpaper department, as I was.

I have been absolutely overwhelmed by the number of fantastic outside organisations that are doing their bit to support young entrepreneurs. I do not have time to mention them all, so I will pick just a few. Perhaps surprisingly, the first is the Scouts. My fiancée, Jo, and I had the pleasure of being invited to act, in effect, as “Dragons’ Den” business mentors and advisers to the Stratton St Margaret first scout group. The entrepreneurs badge is new, but 10,000 children have already taken it, and I am delighted that my hon. Friend the Member for South Swindon (Mr Buckland), who I share an office with, will be encouraging his son, George, to take it as soon as he joins the Scouts.

I learned two things from my experience. First, the kids absolutely loved doing the badge. They spent the first three weeks raising money. In a similar way to people on the young enterprise scheme, they came up with their business concepts. There were two teams, which Jo and I had to judge. They were both very creative. Indeed, as soon as we arrived, the first team said, “You look thirsty. Can we make you a cup of tea?” Spotting a way to influence our decision, the second team then said, “You look hungry. Here’s a cake.” That worked, and we were impressed.

We had to choose which team was likely to be the most successful, and that team was then given a £50 boost. The teams’ ideas were brilliant. We were able to advise them. For example, one team had secured a pitch in front of the big screen in the town centre. The team was really excited, but I asked what would happen if it rained, because the pitch was not properly covered. That was the sort of advice the teams needed before they started.

I also met people from Virgin Media Pioneers, a brilliant scheme that allows young people to upload videos asking questions and seeking advice from other young people taking their first tentative steps into business. The scheme is a wonderful resource. I took time to look at some of the videos and at some of the questions people were asking. Underneath, there were reams of comments and helpful suggestions. The person who asked the original question would come back and say, “Thank you. That’s what I’m going to try.” I am delighted that such things are there, because young people get technology.

On Monday, I met Miles Jacobson, the main guy at Sports Interactive. For those who are not computer geeks, like myself, I should explain that Sports Interactive creates Football Manager, which sells more than 1 million copies a year. We had a good, productive meeting, at which we talked about how easy it is in theory to get young people to start technology businesses creating apps and computer games. Miles Jacobson believes that, for as little as £10,000, people can have all the licences and equipment they need to get going. We are looking to embrace high-tech industries, and the one thing young people certainly understand are the mobile phones we all carry around and get confused by. I therefore encourage the Government to look at that issue.

In summary, I want to highlight my three key requests. I have met so many young people who are keen to be entrepreneurs, and they just need that extra bit of help. I welcome the provision of access to finance, but the single most important thing we can do is provide mentors and advice. Where there are opportunities such as those offered by the young enterprise scheme and the Scouts, they should be built on. These things are not simply fun exercises that can be put away and forgotten in the back of people’s minds. People who take part in such schemes should be told, “You’ve done really well. This is your No. 1 choice as a career path. You should think about it.”

I want the Government to do everything they can to accelerate the delivery of the business mentor programme, to encourage the organisations that take part in it, such as Virgin Media Pioneers, and to give young people the opportunity to access the programme. I also want Ministers to do all they can to encourage schools, colleges and universities to promote the opportunities offered by entrepreneurial schemes, which give young people real life experience.

Finally, I make a direct plea to the Minister. I want him annually to celebrate and highlight the best young entrepreneurs from across the country and to support the organisations that help them achieve what they do. In that way, we—the key decision makers in Parliament—will understand these issues, demand support for those involved and push entrepreneurism as hard as we can as a real career path for young people.