Enterprise Allowance Scheme

The Enterprise Allowance Scheme was an initiative set up by Margaret Thatcher's Conservative UK government which gave a guaranteed income of £40 per week to unemployed people who set up their own business.[1] It was first announced on 13 November 1981,[2] and piloted between January 1982 and July 1983, funding 3,331 individuals.[3] Introduced nationwide in 1983 against a background of mass unemployment in Britain, it went on to fund 325,000 people, including Creation Records head Alan McGee; Superdry founder Julian Dunkerton; artist Tracey Emin and the founders of Viz magazine.[4][5] Anyone wishing to claim money under the scheme was required to fund the first £1000 out of their own funds, and also to produce a basic business plan.

Proponents of the scheme believed that it would have a great impact on unemployment, and support entrepreneurship. Critics pointed to figures which suggested that one in six of the start-up businesses failed in the first year, and said that it had no significant impact on unemployment figures as most of the start-ups were sole-trading operations.[1]

A similar scheme, the Back to Work Enterprise Allowance was set up in Ireland.

On 6 October 2010, a plan was announced by Work and Pensions Secretary Iain Duncan Smith to revive the scheme, giving mentoring and funding of up to £2000 to those unemployed for over six months and wishing to start up their own business. The funding would include a weekly payment linked to the value of their benefit, and £1000 for the purchase of equipment.[6]