Improved access to training, addressing issues with Universal Credit and enhanced parental benefits are urgently needed to improve conditions for the UK’s vulnerable self-employed, according to a joint report by the Association of Independent Professionals and the Self Employed (IPSE) and Community, the Trade Union.
‘Under Pressure: Enabling the self-employed to break free’ identified three key indicators of vulnerability – low earnings, a lack of autonomy at work and the lack of financial security. Any self-employed person who faces two of these indicators could be considered vulnerable. The report found that between nine and 13 per cent of the self-employed population is at risk of being vulnerable.
IPSE and Community have made six recommendations to reduce vulnerability of the self-employed:
1. Improve access to training as a route out of low pay: Low pay is exacerbated by lower levels of training and qualifications among the vulnerable self-employed. Government should make training for new skills tax-deductible, thus making upskilling more attractive and viable for those on low pay. It should explore introducing robust criteria for certifying online training courses for the private sector.
2. Ensure Universal Credit works for the self-employed: Extending the one-year minimum income floor (MIF) period to two-years would open it out to a much larger proportion of the low earning self-employed. The MIF should be calculated on a quarterly or annual basis to properly account for the fluctuating incomes of the self-employed.
3. Create a self-employed benefits package: The self-employed do not have access full maternity pay, paternity pay and paid parental leave. Government should introduce a parental benefits package that works for self-employed people and provides a safety net to protect and grow their business.
4. Strengthen protection against late payments and unpaid work: The Small Business Commissioner must have real power to hold late and non-payers to account. Guaranteeing payment terms and the right to a written contract would also be very positive steps.
5. Introduce a statutory definition of self-employment: A statutory definition of self-employment would reduce the risk of false self-employment, thus making it harder for businesses to force people into self-employment against their will. Not only would this give falsely self-employed people back their rights; it would also give the legitimately self-employed greater control where it is lacking.
6. Incentivise ways for the self-employed to come together: Mutual assistance groups, co-operatives, trade unions or membership groups allow people to mobilise collectively around issues that matter. They allow the self-employed to promote change, improve the lives of the vulnerable self-employed, and act as a hub for like-minded self-employed people to come together.
Roy Rickhuss, General Secretary of Community, said: “The self-employed sector will soon be bigger than the public sector. Trade unions must face up to the huge challenge of organising these workers and providing support that is relevant to their working lives.
“This report sets out some of the problems self-employed workers face. Crucially, the government is failing to support a group of people who offer so much to the British economy. Community is determined to recognise the challenges posed in this report, and we are working hard to make sure we are relevant to the modern working world.”
Simon McVicker, IPSE Director of Policy, said: “Self-employment is insecure by its very nature. But not every self-employed person needs additional support. This report identifies areas of the self-employed population at risk of being vulnerable, and puts forward recommendations to change that.
“Upskilling is the best route towards higher pay for the self-employed. The government announced it will look at training for employees and the self-employed at the Budget. We will respond to the consultation and make the point that the government needs to make training for new skills tax-deductible for the self-employed – something only employees are able to access at the moment.