LFIG have published their new report entitled 'The Freelancing Agenda' this article explains the reasoning behind the report and the need for Labour to focus on the self employed as well as small business.
Labour must be the party both of and for the self employed
and small business if it is to win the next election. It is on strong ground as
it has an excellent Labour Business team who are widely respected. Labour’s
grassroots are being filled with those who run their own businesses, work as
self employed or as freelance. It is growing to become a key constituency both
within the Labour party and within society.
In March 2013, Labour’s Small
Business Task Force report, ‘An Enterprising Nation’, made recommendations to the Labour
Party for policies to help small businesses. The report looked in part at
freelancing and self-employment, and suggested that ‘greater clarity around the distinction between genuine freelancing and
false self-employment is required to enable small businesses to use
freelancers legitimately’.
The publication of our report entitled ‘The Freelancing Agenda’, commissioned
by the Labour Finance and Industry Group, comes partly in response to
that. It offers a set of principles, in the form of a Charter, and some
specific policy recommendations, including a new definition of freelancing for
tax and other purposes, that can help Labour to update its policies for this
constituency, by enhancing, not compromising, the party’s core values. Labour needs to offer both a small
business agenda and also one for the self employed too.
Last week Demos published a report in this area entitled ‘Going it alone’, its
author Duncan O’Leary noted that “The Labour
party has an uneasy relationship with self-employment. Fears of tax evasion by
high earners and the exploitation of low earners dominate the party’s discourse. The
policy focus is on stamping out abuse, rather than supporting those for whom
self-employment is an active choice”.
These are the goals of our
freelancers’ charter. To provide a positive agenda for the self employed that
Labour can embrace.
Our report is published as a short booklet, it looks at the size of
the freelance economy, the lack of definition and recognition that freelancing
faces and the evolution of the market. The report recognises that freelancers
range from precariat workers through to independent professionals but there is
commonality between all the groups. It discusses the evolution of the
freelancing market and the need for agency freelancers to use limited liability
companies. It differentiates genuine freelancers from those using the model for
tax avoidance and those in forced self employment. One of the recommendations
includes a well thought out proposal to create a special freelancer limited
company (FLTD) which it suggests will allow some of the onerous and
unachievable requirements of IR35 to be toned down and will allow for clearer
identification of freelancers.
We
see the Charter as providing a
platform or operating model upon which future policy can be developed for
freelancers. Such that one could consider individual polices to be the Apps
that would operate on the platform.”
We have made a start too and issued the report with a few of our own
policies or Apps and these include the creation of this Freelancing Limited
Company (FLTD) and the appointment of a Minister with direct responsibility for
freelancers.
It is timely because the ONS
have reported that the growth in self employment outstrips new jobs[1].Mike
Cherry the Policy Chairman for the FSB has said that it represents a
‘structural change’ in the labour market and is here to stay. The RSA recently reported that the number of people working as self-employed is
set to outstrip those working in the public sector by 2016.
To write the report we have spoken to individuals and groups
representing actors, journalists, artists, pharmacists, IT workers, management
consultants, construction workers, teachers, film and television workers,
agencies, accountants, tax specialists and more besides. Interestingly the two consistent
issues coming through are for .’clarity and parity’. For the independent
professionals this is clarity over their status as self-employed and parity
with other businesses also competing for business. They want to the chance to
compete fairly and be judged as being in business on their own account. For the
precariat workers and others they want parity with other workers when they have
to interface with the benefits system and clarity over how they can receive fair
treatment at work. All sight the right to be paid and the right to be paid on
time as key requirements. While it is outrageous to pay wages late large firms
seems to get away with the late payment of small businesses.
Our report concludes that
freelancers are not small businesses in the traditional sense, that they are
instead their own economic agents often with premium and important skills which
have allowed small firms to innovate and grow. That they are drivers of
economic growth. I see that in effect just as every small shop doesn’t want to
be the next Tesco’s not every IT freelancer wants to be the next Google. The
growth isn’t in their own businesses but elsewhere in the economy. They are not
a competing shadow workforce but positive complementary one which deserves
recognition and be protected and nurtured.
There
is a shared agenda for freelancers and a lot common purpose between all groups.
I hope that this report can help all groups come together and build a positive
agenda for the common good. The
LFIG report offers the chance for Labour to seize the initiative and clearly
differentiate itself as the most progressive and innovative party in this area
and clearly identify itself as for the party for the self-employed. We
encourage you to read the report, review the charter and help put the issue of freelancing
and the self-employed on the agenda for the general election.
Philip Ross is a member of LFIG and the lead author the report ‘The
Freelancing Agenda’.
[1] http://www.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/2014/02/20/growth-in-self-employment-outstrips-new-jobs-shows-ons-data.aspx
