Labour would bring reform and renewal to the forgotten self-employed

We’ve already shared our high-level view with ContractorUK, but it bears repeating because we want contractors, the self-employed and their representative bodies to help us build on it, writes Philip Ross, vice-chair of Labour Business.

And our view is this. Tax law is a mess, employment status is out of date. Vulnerable workers are being exploited, entrepreneurs are being impeded, and swathes of the self-employed are excluded from support or are forgotten.

Together, these individual problems have conflated to drive workers out of self-employment altogether, and they have led to the retirement of tens of thousands of skilled workers. The HGV driver crisis in the summer of 2021 was a high-profile example of this and we don’t want it reoccurring.

We need to bring the self-employed reform and renewal

In short, Labour Business believes change is needed to both protect the vulnerable but also to empower and support those self-employed who are the skilled dynamos that power and support our economy.

To achieve both of these we need reform and renewal.

Not employment rights per-se but rights at work. Such as the right to

• a written contract;
• be paid on time; and;
• know how much a client is paying for your services.

Further exclusions to fix

In addition there are a number of universal social protections that need to be extended to the self-employed.

Pay needs to be fair, and margins taken by third parties such as agencies and others need to be transparent.

Further with pay, there is an estimated 40% pay gap between self-employed men and women which cannot be allowed to stand. Professional workers, as the barristers strike of 2021 showed, are as vulnerable to exploitation and relative low pay as other workers.

There remains an unhealthy precedent for some self-employed, even in professional occupations, to have to undertake work for free. Worryingly for our economy, then, there are 4.2million+ of these people -- the self-employed, mirroring the size of the public sector.

No easy answers

I’m not under the illusion that there are easy answers.

But we have been keeping a close eye on self-employment issues for the last eight years, helping to inform a number of policy proposals that are now coming together, further informed by us working with self-employed associations and bodies to build consensus.

As a party, the economic goal of Labour is to deliver growth, drive innovation and raise investment.

Four already established policy pillars

Labour Business’s previous published positions, on which we will lobby Labour for, are outlined below.

1. End the farce that workers can be taxed as employees but without any employment rights.While achieving this necessitates the reversal of the IR35 off-payroll rules (introduced on April 6th 2017 and April 6th 2021 in the public sector and private sector respectively), it also means resolving wider issues around employment status. We must protect the vulnerable and empower the self-employed to create the prosperity that will benefit us all. Key to the latter, the Freelancer Limited Company structure must be proposed, to allow all self-employed people to be taxed fairly and to solve the IR35 issue once and for all.
2. Legislate to grant the self-employed the right to a written contract, and to be paid on time like the ‘Freelancing isn't free’ Act in the USA.
3. Enshrine for the self-employed the right to join a union or a licensed representative body, able to represent workers in payment or contract disputes. Such bodies can help independent workers overcome late payment, and support them with any employment status disputes including in relation to bogus self-employment.
4. Support plans for sick pay and maternity/paternity pay for the self-employed, whether through schemes like Bread Funds, or due to innovation in the tax and benefits system.

This is only the start...

Other policies are in the pipeline, and we are confident Labour will take them forward. Indeed, at conference this year, Labour’s deputy leader Angela Raynor spoke of rights for the self-employed -- on late payments and contracts. Pleasingly, that was a reflection of our lobbying, because it’s not just during covid that these workers have been wrongly excluded from being given the most basic level of support and assistance.

Labour has a National Policy Forum and a key pillar for discussion is self-employment. There is no limit to what can be proposed to help an army of workers as big as our public sector. But Labour needs to show the 4.2million self-employed that it gets it. Not by guessing but by listening  -- then by acting. And as Labour Business we will be doing everything possible to help this happen.