Self-employment is without doubt now a central part of the labour market in the United Kingdom. 4.8 million people work for themselves, almost 15 per cent of the working population – this is a big shift that everyone is still getting used to. But how should the Labour party react and support the millions of people who now work in this way?
This is the question at the heart of IPSE’s fringe event taking place on Monday evening – ‘Changing perceptions: How does Labour become the party of microbusiness and the self-employed?’ The first and most important step Labour must take is to recognise the vast majority have made a positive decision to work independently. Indeed, the department of business, innovation and skills this year found 84 per cent thought their life overall was better in self-employment compared with being an employee and over half believe they are better off financially.
The world of the 9-5 and ‘job for life’ is dying and this is no bad thing. Individuals increasingly want autonomy in the way they work and to devote themselves to projects they really care about. This benefits the whole economy too – Oxford Economics has demonstrated that independent professionals contribute £109 billion to the UK economy each year.
But many working independently believe the Labour party does not fully recognise their way of working. Ed Miliband pledged to support the self-employed in his 2014 conference speech, terming them ‘the most entrepreneurial, go-getting people in our country’. But the self-employed community was disappointed as Labour’s approach became more negative as the 2015 election approached. The only mention of self-employment in Labour’s policy platform prior to the election was that ‘the rise of self-employment could in part be evidence of growing insecurity in the labour market’.
As the smallest of small businesses, IPSE believes Labour should be championing the self-employed, while ensuring they are properly protected in areas including equal maternity pay, late payment and pension provision. Constructive responses are already emerging from the trade union movement. At last week’s TUC congress, a motion was raised highlighting the problems the self-employed face with government’s Making Tax Digital plans, as well as calls to support freelancers around intellectual property and fair contracts.
By engaging with the real issues self-employed people face, not simply dismissing it as an illegitimate way of working, Labour can become the party of microbusiness and the self-employed. For example, the basic state pension on its own will not provide self-employed with a sufficient standard of living – Labour should explore the possibility of a flexible pension solution for the self-employed administered by the National Employment Savings Trust. Independent professionals also struggle with the tax system. Labour should be urging the government to think again on their deeply damaging proposal to reform the way IR35 works in the public sector, which will hurt not only the self-employed but vital public services too.
When the leader and shadow chancellor get up to speak to conference next week, we hope they reflect on the positive role self-employment plays in the UK economy, while recognising the unique challenges they face. On Monday night too, our expert panel involving Stephen Kinnock MP, Seema Malhotra MP and John Park (Assistant General Secretary, Community trade union) will analyse what steps Labour should take to better support the self-employed. We hope to see you there.
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Jordan Marshall is policy development manager at IPSE. He tweets at @JLMarshall90
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JOIN US FOR …
Changing perceptions: How does Labour become the party of micro-businesses and the self-employed?
Monday 26 September, 6-7.15pm, Comedy Central, 17 Edward Pavilion, Liverpool L3 4AF
Speakers: Seema Malhotra MP | Stephen Kinnock MP | Simon McVicker, Director of policy, IPSE | John Park, Assistant general secretary, Community | Chair: Sarah Hayward Leader, London borough of Camden
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