Chancellor has been urged to use his Budget on 3rd
March to give greater security to self-employed workers and
prevent a possible ‘exodus’ from self-employment in the wake of
the Covid pandemic.
The recommendation is made in a new report from the Inquiry into
the Future of Self Employment, which is backed by trade unions
Prospect and Community and the Federation of Small businesses and
included a panel of experts from business, the world of work and
across the political spectrum.
The Inquiry found that a majority of self-employed workers were
unsure about continuing to freelance in the future, with a clear
appetite for a stronger safety net if they are to continue.
If these workers did decide to give up on their businesses in
favour of more secure working conditions, the impact on the
recovery from the pandemic could be drastic, the Inquiry warns.
To avert this fate, the Chancellor should take action to
strengthen the safety net for the self-employed.
The package of recommended policy measures includes:
- Ending the exclusions from the government’s income support
packages
- Extending health and safety rights at work, sick pay, and
paid parental leave to the self employed
- Changes to Universal Credit and the pensions system so they
work for the self employed
- A new Commissioner for the Self Employed in government to
coordinate policy efforts
- Redrawing definitions of self-employment to be more
inclusive, and delaying controversial IR35 rules which will cause
more uncertainty
As part of their research the Inquiry conducted a survey of over
2,200 self-employed workers. Key findings included:
- 46% said they were less likely to continue in self-employment
due to their experience in the pandemic (18% unsure, 36% likely
to continue)
- 88% said the level of pandemic support for the self-employed
was not a fair reflection of their tax contribution
- 79% would oppose the equalisation of National Insurance
Contributions between employees and the self-employed (21%
support)
- But 51% would support paying more out of their wages in
exchange for a stronger safety net (12% oppose)
- 75% do not believe they have sufficient workplace rights
compared to employees (15% believe they do have sufficient
rights)
Prospect general secretary Mike Clancy said:
“This pandemic has exposed the precarious nature of the UK’s
self-employed workforce, with too many people risking too much to
pursue their careers.
“It is time for a rebalancing of the risk and reward for the
self-employed, with government acting to give greater support in
the short term and a renewed sense of security and stability to
protect against the uncertainty that the future holds.
“The self-employed can be the engine of our economic recovery if
the government backs them now, this budget must be the one where
the Chancellor finally delivers for our freelancers.”
Roy Rickhuss CBE, General Secretary of Community,
said:
“Over the last year the self-employed have often been the
forgotten millions of the pandemic when it comes to government
support, leaving many of them left behind and facing significant
financial hardship.
“Our report highlights the extent of the difficulties
self-employed people have faced in the last twelve months. The
government has thus far been unwilling to respond to these
challenges, but what we need now is for them to act swiftly and
implement our inquiry’s recommendations. In the immediacy the
government must provide the self-employed of this country with
financial support to address those excluded from existing
schemes, so millions across the country no longer have to worry
about paying their bills or putting food on the table. They must
also act to provide greater security to the self-employed in the
future, including by extending benefits like parental leave and
sick pay as well as delaying the introduction of the IR35
regulations.
“Self-employed workers play a vital role in our national economy,
making up roughly 15% of our workforce and being pivotal to the
UK’s fastest growing and innovative industries such as in
science, engineering, healthcare, the arts, entertainment, the
media, and in the delivery of other important services across the
country. They must be supported through this pandemic and beyond.
We hope the government heeds this report and creates a more
stable foundation for self-employed workers in the future, and
ensures that the many voices of currently struggling
self-employed workers are heard.”
FSB National Vice-Chairman Martin McTague said:
“FSB was originally set up to be the voice for the self-employed
in the 1970s, and we are now at a similarly critical moment for
the UK’s self-employment community as we look to how to come out
from this pandemic to 2030 and beyond.
The report includes a raft of proposals to help the self-employed
stay in business and give them a shot at survival during these
trying times. It will be essential reading for the Treasury, to
inform what we hope to see on 3 March - a Budget that drives
recovery, clarifies support and regulation, and puts a thriving
self-employed population back at the heart of its medium-to-long
term economic plan.
“We’re grateful for the work Prospect is doing in this space and
for including us in this important Commission’s work.”
Ends
The full report, also embargoed until 2200, 11 February 2021, can
be downloaded here
