Mark Leftly: Government’s six-month allowance leaves women entrepreneurs behind

 

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The Independent Online

Westminster Outlook Bizarrely branding himself “the quiet man” did Iain Duncan Smith few favours when he briefly led a Conservative Party that was screaming out for a vocal protector as it was brutally thrashed by Tony Blair.

But 11 years on and there are advantages to turning down the volume: bolder claims are overlooked and unverified, records left unpicked.

Which brings us to Karen, a member of that vast battalion of surnameless wonders on whom politicians are so reliant. Karen was one of those lucky enough to be half-name checked in the work & pension secretary’s address to Conservative Party conference last week.

The thing about IDS is that his speeches are often very detailed, well-argued, statistically impressive affairs, yet should the likes of Karen desire anonymity, this is the address to be mentioned in. To borrow, and rather misinterpret, part of a monologue from the sci-fi classic Blade Runner, IDS speeches are lost in time, like tears in rain.

What has been lost in this under-reported speech is not a bioengineered android’s vivid memories of attack ships off the shoulder of the Orion constellation, but Karen’s success. 

IDS was arguing that his welfare reforms were about “life-change”: “For lone parents – more of whom are now in work than ever before – which we know is the best route to lift them and their children out of poverty. Like single mum Karen, helped to set up her own business through the New Enterprise Allowance, which has supported 53,000 new start-ups.”

That sounds pretty remarkable – and note that, with 53,000 examples at his disposal, IDS specifically named a “single mum”. The 60-year-old Chingford and Woodford Green MP has gone out of his way to emotively highlight that this scheme has benefited a woman in a particular circumstance and, by inference, women in general.

The NEA provides money and help for over-18s on certain benefits, including jobseekers’ allowance and lone parent support, to start-up businesses. This includes a weekly allowance paid for up to six months and a five-year unsecured loan of, typically, £4,500.

The Government’s sales pitch for the scheme has been quite impressive – even using Dragons’ Den star and Reggae Reggae sauce entrepreneur Levi Roots to promote the NEA – but, to be fair, so are the statistics.

Between April 2011 and June this year, 105,240 people started working with a NEA business mentor and over half – 53,350 to be exact – moved on to receive the weekly allowance. That seems to be a solid retention rate given the difficulties and stress of starting up your own business.

Although the peak for new start-ups was in April last year at 2,480, 10 of the next 14 months were between 1,800 and 2,200, suggesting the scheme has now reached a stable, natural run rate.

Yet only 18,450 – 34.6 per cent – of those who entered weekly allowance were women. This might not sound like such a meager percentage, given that the most quoted target in British businesses is Lord Davies’ aim to get just 25 per cent of female representation on FTSE-100 boards by next year.

What should be remembered, though, is that more women than men have moved into self-employment since the financial crisis struck.

From 2008-11, women accounted for 80 per cent of the new self-employed, and they have since continued to outpace men in wanting to become entrepreneurs, according to the Office for National Statistics. This strongly suggests that women should be making up the majority of those taking up the three-and-a-half year old NEA scheme. Yet not only do women barely account for a third of those who have benefited, this figure has hardly moved in well over a year.

Last June, the figure was about 30 per cent, which was at least a good deal better than the 17 per cent of the previous summer. That there has been little improvement since suggests that, like the overall start-up figure, a natural trend has been established that will ultimately still see far more men than women take advantage of the NEA.

Even allowing for extra funding that has focused on encouraging ex-service personnel to look into the NEA, there is clearly a problem here. When the issue was raised on the floor of the House of Commons last summer, the business minister Jo Swinson insisted the “Government recognise this is an issue where can and will do more”.

It doesn’t appear that this has subsequently been the case. Perhaps the Coalition should look closely at the Prowess: Women in Business website, which points out that the scheme doesn’t give women sufficient time to establish a successful business.

For example, as women tend to work part-time, so their businesses take longer to get off the ground. I would suggest that a six-month allowance does not, then, provide a sufficient timeframe of support.

At least Karen has benefited and I don’t blame politicians for naming those they’ve helped at a time when their motives and characters are so dismissed by the public at large.

But there could be thousands more single mums or women generally who haven’t been able to take advantage of the NEA, their hopes and business ideas lost in the rhetoric of a quiet man.

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