DWP must wake up to impact of Universal Credit on self-employed and economically insecure says RSA

“Universal Credit risks sinking potentially viable businesses, many of which could go on to be job creators and tax contributors, without real reform. 

“In particular, the ‘start-up’ grace period for entrepreneurs on Universal Credit should be extended from one year to two years: RSA research suggests that average earnings for the self-employed almost double in the first three years, showing that it takes a while to establish a business.

“Given the self-employed have grown by 46% since the turn of the century, the government would be wise to pay attention to this increasingly influential demographic.”

Anthony Painter, Director of Action & Research at the RSA, added:

“The DWP set out to do the impossible – micro manage the lives of millions on low and no pay – while cutting budgets and developing a highly complex system. Despite repeated evidence and warnings it has ploughed on regardless due to political imperatives. Rapid relief for those suffering from the changes would be welcome. But the fundamental problem is Universal Credit itself. A system that provide economic security is urgently needed and vastly different approaches should be explored. The RSA advocates evidence-based trials of Universal Basic Income as the Scottish Government is exploring. These should be expanded to the rest of the UK too.”