House of Lords calls on research by NW body for report on Universal Credit reform

A North West social enterprise has contributed to a new House of Lords report calling for reform of the Universal Credit system.

The Lords’ Economic Affairs Committee has launched its proposals in ‘Universal Credit isn’t working: proposals for reform’, which sets out a roadmap of reforms to make the system fit for purpose.

It uses contributions from research and advocacy work by The Women’s Organisation, which has operations in both Liverpool and Manchester.

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.

The Women’s Organisation shared its 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, said: “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.”

She added: “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 initiative to create their own employment, and fundamentally aid the UK’s economic recovery.”