Liverpool-based social enterprise The Women’s Organisation gives evidence to a new House of Lords report that claims Universal Credit is failing millions of people. Tony McDonough reports

Current rules on claiming Universal Credit (UC) create a barrier to self-employment, Liverpool social enterprise The Women’s Organisation claims.

Based just outside Liverpool city centre, The Women’s Organisation is the lead agency for Liverpool City Region Enterprise Hub, which provides advice and practical support to thousands of men and women who have started their own business, or are looking to do so, every year

However, the organisation says the current system is failing people who aspire to self-employment because it assumes people are earning a full-time minimum wage as soon as they become self-employed and therefore is disqualifies them from claiming UC.

The Women’s Organisation, using evidence from its work with people in Merseyside and Greater Manchester, has contributed to a new report by the House of Lords Economic Affairs Committee which is calling for “drastic” reform of UC, claiming the system is failing millions of people.

Helen Millne, deputy chief executive 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.

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“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.”