From the TUC

A ‘new’ enterprise allowance

05 Oct 2010, by in Labour market, Society & Welfare

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.

8 Responses to A ‘new’ enterprise allowance

  1. Tweets that mention A ‘new’ enterprise allowance | ToUChstone blog: A public policy blog from the TUC —
    Oct 6th 2010, 7:40 am

    […] This post was mentioned on Twitter by ToUChstone blog, Jason Maher. Jason Maher said: @mikechitty: 'New #Enterprise Allowance' – not sure it will create new businesses more funding 4 training orgs? […]

  2. Gareth Sear
    Oct 6th 2010, 11:21 am

    Hmm, not sure how well this will work. Tough call helpong long term unemployed into self employment. It is harder than getting a job. A £2k carrot may help them though, at least to start up. No carrot for sustainability?

    Worth doing the maths on this on. 10,000 new businesses. Each one needs to make £18k of profit to give the person something to live on. That is £180m of profit, plus turnover. Lot of business will need to be done. £2000 to each start up – £20m cost. Would this money be better spent if they used it to develop community support and peer to peer support along with Enterprise Coaching to help?

    As with most things ralating to business support, nothing is new.

  3. Uncle Gary
    Oct 7th 2010, 12:24 pm

    The numbers don’t add-up. Margaret Thatcher, 1983, Enterprise Allowance Scheme, £40 per week for one year =£2,000. 27 years later, IDS is giving £2,000. Hasn’t he heard of inflation? Tracey Emin(unmade bed), Alan McGee(Oasis/Creation Records), Julian Dunkerton(Superdry) all became millionaires under Thatcher’s £40 pwk scheme(note Dole was £25 pwk)
    Dole today is £65 pwk, I think the NEW Enterprise Allowance Scheme should be £100 pwk

  4. Angela Wigmore
    Oct 8th 2010, 6:56 pm

    I have been wanting/trying to set up my own business for the past 4 years. I am experienced in my chosen idea and am certain it will be successful and lift me out of the poverty and frustrations of living off benefits. BUT although I have been through the DWP’s so-called help for over 50s (business guidance) I have never been offered any start-up finance and to date all my attempts to raise even £500 to get started have had negative results. I shall definitely apply for this initiative.

  5. Nicola Smith

    Nicola Smith
    Oct 11th 2010, 2:54 pm


    If you have been out of work and claiming JSA for over 6 months you are already entitled to the self-employment credit – more information is here

    I hope this is useful.


  6. Jon Danzig
    Nov 7th 2010, 12:06 pm

    In the early 1990s I scripted and directed a series of video films explaining and promoting the Enterprise Allowance Scheme. Regional versions of the films featured the stories of many successful businesses started by people who had previously been unemployed. My videos were shown at Job Centres throughout the country. I believe the scheme was a great way to encourage and assist self-employment as a viable alternative to unemployment.

  7. tim
    Nov 26th 2010, 11:12 am

    how do i apply for the new enterprise allowance as have asked at jobcentre and they had no idea

  8. Nicola Smith

    Nicola Smith
    Nov 26th 2010, 11:18 am


    As I understand it the new enterprise allowance may not be in place until April next year – but the Jobcentre is probably your best source of information. Or you could try Direct Gov or your local Citizens Advice Bureau.