A ‘new’ enterprise allowance
The only new announcement in Iain Duncan Smith’s speech to the Conservative Party conference appears to have been the introduction of a ‘new’ enterprise allowance for people who have been unemployed for six months and want to start their own businesses. This will be worth £2000 in benefits and training. Interestingly enough, the last Government had already introduced support with self-employment for unemployed jobseekers who have spent six months on benefits, which is still available and provides access to advice and support from specialist providers and a £50 per week trading allowance for 16 weeks (£800).
It may be that the new allowance is slightly more generous (at this stage without more details on how the £2000 is broken down between benefits and training it is impossible to tell), but it doesn’t sound dramatically different to what has come before. What is certain is that the Government are likely to struggle with their target of setting up 10,000 new micro-businesses as a result of the allowance - under the previous Government’s scheme fewer than 10,000 jobseekers took up the self-employment option over a nine month period, and it can be expected that significantly less went on to start up successful micro-businesses.