Previous Section Index Home Page

To go beyond those general regimes and institute special controls on franchising, however, it would have to be shown that those businesses are especially risky or hazardous. There are undoubtedly risks, and some are specific to franchising. Anyone who considers buying a franchise needs to consider them carefully and seek advice, as I have stressed. As I have also said, our Business Link website provides helpful advice to anyone who is starting a business, including specific advice on buying a franchise. That highlights the
24 Oct 2006 : Column 1497
advantages and disadvantages of franchising, and points to further sources of advice, including the banks and the BFA.

To make a special case for special controls on franchising, however, it would have to be shown that those businesses are especially risky or hazardous. The evidence, such as it is, does not support that idea. Although it is not conclusive, it does not suggest that franchises are more risky than other forms of business start-ups. Of course, any deception or fraud must be properly tackled, and it will be. But at the end of the day, the Government cannot insure businesses against the possibility of failure. I hope that this evening’s short debate, and the painful experience of my hon. Friend’s constituent, will serve to draw attention to some of the downside risks involved, and those should not be underplayed. I do not want to end on such a downbeat note, however. We should not lose sight of the fact that new business start-ups are a vital seed bed for future growth and prosperity in our economy. They
24 Oct 2006 : Column 1498
are a source of innovation, competition and new ideas, and they create more jobs than established business at all points of the economic cycle.

The Department of Trade and Industry works closely with the regional development authorities to ensure that start-ups are offered appropriate business support. Those who wish to start new businesses should of course think carefully and weigh up the risks as well as the opportunities, but they should not be unnecessarily put off. As I have said, there are sources of advice available for anyone considering starting a business.

I again thank my hon. Friend for raising these important issues this evening. I hope that he will understand why I have not responded directly in regard to the individual circumstances that he has described, but I shall be more than happy to discuss the matter with him in due course.

Question put and agreed to.

Adjourned accordingly at nineteen minutes to Eleven o’clock.

    Index Home Page