Inquiry into the future of self-employment
Since the start of this pandemic, the plight of self-employed and freelance workers has been one of the top priorities for Prospect.
We know that this has still been an incredibly tough time to be self-employed and that the government has not done anything like enough to help.
We need action, which is why Prospect have launched a new Inquiry into the future of self-employment, alongside Community union.
The Inquiry is the first step in the next phase of our campaign for freelancers and the self-employed.
It brings together unions, politicians, policy experts and more to find some solutions to the big challenges we face, like how to provide a proper safety net for the self-employed, how to make sure government understands self-employment, and how to make sure the benefits self-employed people receive are fair compared to their taxes.
Final Report
The final report of the Inquiry was released on 12th February 2021.
The report argues that self-employed workers in the UK face too much risk, and that action is needed to tip the scales back in the direction of additional security and protection. The Inquiry found that self-employed workers had been hit incredibly hard by the pandemic, and as a result many were considering leaving their businesses in the future. The pandemic had exposed to many the financial insecurity of self-employment, and had fostered a desire for additional protections and safeguards to stabilise the position of the self-employed in the future.
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)
In response the Inquiry recommended a package of policy measures designed to support self-employed workers both with the immediate consequences of the pandemic and into the future.
The recommendations included:
- 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
The Inquiry argues that this additional support is necessary to enable a swift economic recovery in 2021, and that failure to offer this support with cause long-term economic damage by destroying small businesses and driving people out of self-employment. With the vaccine offering hope of a return to normality quickly, the cost of a few months of extra support must be weighed against the likely damage caused if no action is taken.
Prospect general secretary Mike Clancy, who commissioned the Inquiry, said:
“The news that barely a third of all self-employed and freelance workers are confident they want to continue to work in this way should be a massive wake-up call to the government.
“These workers have powered our economy in recent years and this flexible workforce were lauded by ministers as key to our prosperity. But the way they have been treated in this pandemic is disgraceful and will have consequences for our ability to recover in 2021 in beyond.
“In the long term we need fundamental changes in how these workers are treated. For now, the government has to listen immediately to this Inquiry and introduce a scheme to halt the stampede away from self-employment that that their policies is causing.”
