A safety net for the self-employed

The self-employed bring an immense amount of value to our society, whether that’s skilled IT contractors working on complex projects, travelling academics, those running small businesses, freelance journalists or construction workers. Many of these people want to be self employed because they welcome the increased flexibility of being their own boss, the better work-life balance, and the freedom and creativity to try new ways of working. This is particularly true of many disabled people, where such flexibility can mean opening up the world of work.

Yet, the self-employed need more support than they are getting. For many people who step onto the path of self-employment, this also means signing up to a world of work without a safety net. During the pandemic, with 150,000 self-employed people missed out on any kind of support because they had not been trading for long enough, as well as many more who were not eligible. It has now been 7 months for many people without any support from the government at all.  And those out of work, sick with coronavirus or self-isolating haven’t been able to claim even the limited support offered by statutory sick pay.

That’s why we are calling for more robust protections for the self-employed, including the right to parental leave, including maternity paternity, adoption and shared parental leave as well as improved access to sick pay and pension entitlement. Being your own boss shouldn’t mean losing out when you start a family or being plunged into poverty because you are sick.

There are rumours that the rate of national insurance that self-employed people pay will be rising in the Autumn budget- if this is true then the self employed will face the same tax burden as employees, without the corresponding rights. This isn’t fair. If there is such a tax rise, then self-employed workers should get something in return. A safety net that’s there for everyone.

There is more that can be done to support the self employed and their small businesses.  We want the government to offer Kickstarter loans to small businesses that don’t affect benefits, no matter how much you work. The government should also ensure that the benefits system is more flexible. Today someone can be left with nothing because of the inflexibility of the system. The income you get running a small business can be erratic- nothing one month, pushing you too low to get state support and then above the threshold the next when invoices come in.  This can stop many promising small businesses in their tracks as their owners simply can’t afford to be without support. Disabled workers tell us that permitted work regulations are particularly inflexible and prevent for whom conventional employment may not be suitable from earning a living at all.

We believe that self-employment has a valuable part to play in the economy – but at the moment, people are being asked to take on far too much risk.

This week our motion to the Trades Union Congress on ‘A safety net for self-employed workers’ passed and was agreed by the trade union movement.

Our motion included calling for the TUC to lobby the government to:

  • Ensure the self-employed receive equal support in our welfare system, including the extension of sick pay to the self-employed, increases to the living wage, shared parental leave and pay.
  • Ensure that those receiving social security can receive small business loans to invest in their business without affecting social security entitlement.
  • Set up a task force to look at the ways that the self-employed can be better supported through the tax and employment system.

If you are a member of Community and need help or advice, please contact us at servicecentre@community-tu.org or on 0800 389 6332.

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