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DERMOT MURNAGHAN: Now we’re told often by politicians aren’t we that entrepreneurs are key to the economic recovery.  Lord Young is the Prime Minister’s Enterprise Advisor and was Secretary of State for Trade and Industry back in Margaret Thatcher’s government and unsurprisingly he agrees that enterprise is key but he says it should be taught to children from a very young age.  Lord Young joins me now from Graffham in West Sussex, a very good morning to you Lord Young.  As I say politicians have been banging on about this for years including yourself when you were in office, why have we still not grasped the importance of entrepreneurs in the UK?

LORD YOUNG: Well we have got the importance in the UK, you’ve seen the number of jobs, the number of companies going up, half a million a year for the last few years.  What we need to do now is prepare people in school not to be an entrepreneur but to have enterprise, to have a positive outlook, to be prepared if necessary to take risks but to do things. 

DM: How young do you think they should start?  

LORD YOUNG: I’ve read about these five year olds, it’s not five, it’s eight or nine.  In primary school, we have 27,000 young people in primary school this month with £5 to see what they can make of it and those who do the best will be coming in to have tea at Number Ten.  It’s just opened their minds to the possibilities and that’s what we have to do all the way through secondary school.  One of my proposals is to have an enterprise advisor for head teacher, to bring in people to motivate young people so they see the sense of what they are really learning.  The four R is really relevance. 

DM: Are teachers four square behind this?  Do you think the blood of enterprise courses through their veins? 

LORD YOUNG: No, of course not.  Are they behind it?  Yes, I think broadly they are, not everyone of course, not everyone in anything is behind things.  I have both the head teachers unions firmly behind me and I think that we’re going to see over the years a gradual change.  In the old days, decades ago, schools only encouraged team sports, they were about producing people who would work in large organisations, the government, the Army, at one time the colonial service.  Today 19 out of 20 firms in this country employ fewer than ten people so we have to produce people who are used to working on their own, taking their own initiative.

DM: So okay, these young people leave the schools, they leave the colleges and they leave the universities keen on being as enterprising as possible but they still go to their bank and as for a start-up loan and they can’t get it.  There’s still a problem, isn’t there, with getting that seed capital?

LORD YOUNG: Well that’s why we introduced, I introduced start-up loans about two years ago.  So far 18,000 or more people are working for themselves, probably employing double that number and it’s increasing.  You know, the Royal Society of Arts survey a few weeks ago showed that 82% of people who work for themselves would not go back and take a job.   

DM: So do you not think there is a problem with the banks at all then?  You’ve cracked that have you? 

LORD YOUNG: No, I haven’t cracked the problem, you never crack any problem in public life.  The problem with the banks is they only lend, they are lending other people’s money so they have to have some form of security.  When you start you have no security, you have nothing but your own hard work and that’s where I think the government should come in to make the first loan and that’s what we are doing.

DM: But is it enough?  If you are going to continue with a long term business you need the support of a bank even if you are not borrowing money from them over the long term and banks are, we hear it time and time again, you must hear it more than us from small businesses that want to be large businesses, that capital is a problem.

LORD YOUNG: Well yes, I hear it from some businesses but probably, possibly their credit is a problem or probably their business plan isn’t good enough.  In aggregate, only in aggregate, small firms have money in the bank.  There’s always problems with start-ups but you know, we have the best environment in Europe for start-up businesses in this country and one of the best in the world.

DM: Still a bit of a problem though as well if you are a consumer facing enterprise with this cost of living crisis. 

LORD YOUNG: Well of course there’s a cost of living crisis, I can remember a cost of living crisis for most of my years and I’ve lived quite a lot of them.  If you are starting up a new business you have to look at  market opportunity, you have to go out and take it and that’s really what my education changes are doing with the backing of many of the education world, about producing young people who are prepared to see an opportunity, take it because in the decades to come people will be changing their job every few years, working for different people, working for themselves, it’s a very different world and all of that has been created by the internet. 

DM: Of course the cost of living crisis is patchy isn’t it?  Some people are doing a lot better than others, is that the area where budding entrepreneurs should face?

LORD YOUNG: Well the cost of living crisis for some people has always been with us and you mustn’t underestimate that and I certainly don’t.  I hope soon we see wages going up ahead of inflation but what I’m concerned about in this endeavour is to get people – you see if you are entrepreneurial you do better in a better in a big company, if you’ve got a positive outlook in whatever you do in life, whether you are in the professions, whether you are in the civil service, whether you are in anything, a positive outlook is the thing that really makes the difference.

DM: How important is it for business within Britain that we stay within the European Union?  We have got a referendum coming up if the Conservatives win the next election in three years’ time, would it be a disaster for business if we vote to leave? 

LORD YOUNG: Well look, some want to stay, some want to leave, that’s not my concern.  I’m merely looking at making sure, in or out of Europe, we have the right business environment, the one that will create jobs.  You know, when I was Secretary of State for Employment there were 22 and three quarter million people with jobs in this country, today it is nearly 30 and a half million, it’s gone up by a third over the last 20 odd years and that’s because we are an enterprising nation and we are showing the way ahead.

DM: Looking at your own party, you talk about being in office and thirty years on, it never seems to go away does it, the turmoil within the Conservative party about the European Union?

LORD YOUNG: Well the problem, the position is still there.  I’m not worried at all whether we’re in Europe or whether we’re not in Europe, what I am worried about is whether we are over-regulated and if David Cameron can negotiate changes in Europe so that we’re no longer over-regulated then I think we face a much better future.  

DM: Lord Young, very good to talk to you, thank you very much for the time.  That’s Lord Young talking to us from beautiful West Sussex there.