“There is no point knocking doors here. There won’t be many people at home. Let’s just deliver leaflets.” It was a Monday morning in April 2015, and I was keen to meet as many voters as possible, so I ignored the advice. I’m glad I did. For that morning I met a number of people, working from home, self-employed, trying to use every hour productively.
That I met so many is unsurprising. The reality is we are seeing an unprecedented boom in self-employment in this country.
According to the ONS, between 2010 and 2014, the number of self-employed people increased by 663,000. Indeed, in 2014, 15 per cent of the workforce was self-employed, some 4.6 million people. This isn’t just a major spike in our history, it also gives us the highest rates of self-employment in the G7.
This extraordinary rise shows little sign of reversing. Which throws up a huge number of policy questions if we want to ensure that this rapidly changing employment market doesn’t leave millions of workers precariously standing alone at the mercy of market forces.
As is always the case with challenges such as this, it falls to Labour to make the political case for action. Because inevitably the Tories will revert back to their time honoured answer – people are on their own and can sink or swim accordingly.
As the party that wants to ensure people from every background have a platform to make the most of their talents, Labour understand that for many people self-employment offers a number of attractions, not least independence.
Many of the self-employed people I speak to tell me that they enjoy being their own boss, or having the flexibility to work their hours around the other things that are important in their lives, like child care or studying. Before my election last May, I was self-employed, so I know the advantages it can sometimes bring.
However, it’s also clear that existing systems have been too slow to catch up with a rapidly changing economy. So for too many people the flexibility, comes at the price of a lack of security.
As it stands, self-employed people have no entitlement to statutory sick pay. Self-employed mothers are only entitled to maternity allowance instead of full maternity pay. This is particularly significant, because whilst the majority of the self-employed are still men, the number of self-employed women is growing fastest. With around half of additional jobs taken up by women between 2008 and 2015 being self-employed.
The New Policy Institute-Citizens’ Advice report, “Who are the self-employed?” found that, in 2015, only 17 per cent of the self-employed were in a pension scheme, compared to 52 per cent of employees, with that latter figure likely to rise even further with the continued rollout of pensions auto-enrolment. Neither are all self-employed people high earners. In fact, the median income from self-employment in 2013-14 was £209 per week.
There’s also the problem that in some areas the status of self-employment is being used as a convenient label, to deny workers their rights.
The Citizens’ Advice report, “Neither one thing nor the other” highlighted the problem of bogus self-employment: “People who are in bogus self-employment can have their hours, the nature of their work and even the amount that they are paid changed at a moment’s notice.” Sadly, this kind of treatment is all too common. The report concluded: “We suspect that one in ten of the people that we surveyed are bogusly self-employed. If scaled up, this could translate into as many as 460,000 people nationwide.”
Since it can be advantageous for employers to categorise workers as self-employed for national insurance purposes, the report estimated that government could be losing as much as £314 million per year from the coffers.
The construction union UCATT have run effective campaigns exposing this kind of malpractice by some umbrella companies. Yet more needs to be done to uncover and stamp out such exploitation.
Bogus self-employment isn’t only an issue for the self-employed themselves. In many sectors of the economy it can also result in a race to the bottom of conditions, driving down standards for all workers.
These are just some of the factors that combine to create a complex challenge. New technology and ways of working have the potential to give millions of people the chance to enjoy far greater freedom. However, there’s also a risk that growing atomisation of people will see many of the workplace protections that previous generations struggled to secure wiped away.
As a Labour historian, I know that such challenges have faced our movement in every generation. We have always risen to the task. Now we must do so again to show that Labour has the answers for the workplace in 2020 and beyond.
I’m proud that as shadow employment minister I have a chance to play my part in that vital work.
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