IPSE backs Vince Cable calls for halt to Universal Credit roll-out

• 24 Oct 2018

IPSE strongly supports Liberal Democrat leader Vince Cable’s calls for a halt to the roll-out of Universal Credit (UC). To support the self-employed, IPSE particularly backs his calls to take fluctuating income into account and assess earnings not over one month but several.

Cable called for a halt to the roll-out of Universal Credit in an article for the Daily Mirror and in a speech at the Joseph Rowntree Foundation. In his article for the Mirror, he said: “While the current Government’s handling of UC has left it on life support, Liberal Democrats argue that with a pause followed by some major reforms, the system could yet be salvaged.”

At present, as well as suffering from significant delays, Universal Credit penalises the self-employed by not accounting for their fluctuating incomes. It can leave a self-employed person up to £3,000 worse-off a year compared to employees earning the same amount.

IPSE’s Policy Development Manager Jordan Marshall commented: “Universal Credit has been a disaster for many people – particularly the self-employed. At present, it simply does not work for them. Not only are they suffering from the severe delays of this creaking system; it also penalises them for their way of working.

“Vince Cable is absolutely right: the current system of calculating Universal Credit payments on a monthly basis doesn’t consider the fluctuating nature of self-employed income.     

“Calculating payments over a few months, or as IPSE prefers, over the course of the year, is a much fairer approach.

“To make Universal Credit really work, the government should also listen to Mr Cable’s call to give the self-employed more time to get their businesses up and running before the monthly assessments kick in.

“The current 12-month grace period forces people to abandon their businesses before they have a chance to succeed.

“Mr Cable’s suggestion to increase this period from 12 to 24 months is a step in the right direction, although IPSE would like to see this extended even further.

“Then, this flawed system could be made to actually work for the UK’s self-employed strivers.”