The UK has over 4.5 million self-employed people in the UK (14% of the nations workforce) of which nearly 2 million are freelancers (without employees). The self-employed contribute over £100 billion to the UK economy.
With a clear simplified regulations, fairer tax regime, level the playing field, a prompt payment code, reducing late payments, improved pension and VAT regime, Labour a will support the self employed.
In a recent study, the Social Market Foundation estimated that 45 percent of self-employed people earn less than the National Living Wage.
The self-employed face multiple risks
- housing (home ownership difficult)
- starting a family (lack of maternity leave/ secure income)
- savings (lack of pensions)
As stated by Debbie Abrahams MP (Shadow Secretary for Work & Pensions), there are five tests that any new social security policies for the self-employed must meet. Tests of adequacy, fairness, equality, responsibility, and respect for the existing principles in our social security system.
Labour will develop policies and assess them against these tests, to ensure a strong and secure safety net for our self-employed, particularly for the low paid. Our economy depends on our small and micro-businesses and Labour will put the support into ensure that they thrive.
Labour Manifesto 2017:
Self-employment can bring many benefits, freedoms and flexibilities to people – and is a vital and often entrepreneurial sector of our economy.
But there is also mounting evidence that workers are being forced into self-employment by unscrupulous employers to avoid costs and their duties to workers. Labour will clamp down on bogus self-employment by:
- Shifting the burden of proof, so that the law assumes a worker is an employee unless the employer can prove otherwise.
- Imposing punitive fines on employers not meeting their responsibilities, helping to deter others from doing the same.
- Involving trade unions in enforcement, e.g. by giving them a seat on the executive board of the new Ministry of Labour.
- Giving the Ministry of Labour the resources to enforce all workers’ rights.
- Banning payroll companies, sometimes known as umbrella companies, which create a false structure to limit employers’ tax liabilities and limit workers’ rights.
- Giving employment agencies and end-users joint responsibility for ensuring that the rights of agency workers are enforced.
- Rolling out sectoral collective bargaining and strengthening trade union rights, because empowering people to claim their own rights in the workplace is the most effective means of enforcement.
We would also extend the rights of employees to all workers, including shared parental pay, making a substantial and immediate difference to the quality of life of people in insecure work. But there are real concerns that rapid changes to the world of work are rendering existing employment categories outdated.
Labour recognises that the law often struggles to keep up with the ever-changing new forms of employment and work, so we will set up a dedicated commission to modernise the law around employment status. New statutory definitions of employment status would reduce the need for litigation and improve compliance.
The commission will be led by legal and academic experts with representation from industry and trade unions.