Universal Credit isn’t working: Our contributions to the House of Lords' proposals for reform

The House of Lords Economic Affairs Committee has launched a new report calling for drastic Government reform of Universal Credit which is failing millions of people.

'Universal Credit isn’t working: proposals for reform' sets out a road map of reforms to make the system fit for purpose, using contributions from our own research and advocacy work here at The Women's Organisation. 

One of the groups facing a barrier with the system is the newly self-employed, and budding entrepreneurs who are dependent on Universal Credit and would like to start their own business. 

This is largely down to the system using an assumed minimum income floor for the newly-self-employed. This assumes that they are earning at least full-time minimum wage - which is not always the case in the early stages of business - placing thousands outside of eligibility for Universal Credit, creating a major issue at start-up level.

We shared our experiences learned from working with women and men across the Liverpool City Region and Greater Manchester, who have faced this barrier in starting their enterprises.

Helen Millne, Deputy CEO of The Women’s Organisation, says: “The evidence that we provided for this House of Lords Economic Committee report on Universal Credit came from women and men who are looking to start their own businesses while dependent on Universal Credit. It is clear that the current system makes it unnecessarily harder for people to become self-employed.

“The newly self-employed should not be subject to an assumed ‘minimum income floor’ under the system. To assume that self-employed people are earning at least full-time minimum wage, and are therefore not eligible for Universal Credit, causes a major issue at start-up level. This is a very real barrier which prevents people from not only creating their own jobs and improving their own personal and financial circumstances through entrepreneurship, but it also prevents future job creation for others, which is a great loss for our local and national economy.

“We now more than ever need to support business creation, not put barriers in the way. We hope that the Government will take action on the findings as a matter of urgency to enable, not penalise, those taking the imitative to create their own employment, and fundamentally aid the UK’s economic recovery.”

You can download the full report by clicking here. 

Click here to read our contribution to Liverpool City Council's 'Rethink Universal Credit' report, ahead of its roll out in 2018.