Could lockdown's legacy for the self-employed pave Labour's path to power?

It now looks like Britain’s left-leaning bloc does too, sensing opportunity in the dearth of supportive and considered policymaking for solo businesses in recent years. So, what could a Labour Party victory at the next election mean for the self-employed? Trade unions and think tanks united this week to put forward their vision.

A left-leaning manifesto for self-employment

This week, IPSE attended the launch of ‘Working for You – A progressive manifesto for the self-employed’ – penned by influential left-leaning think tank the Fabian Society, with the Prospect/Bectu and Community trade unions. It’s not Labour Party policy, but it nonetheless gives an insight into the kind of thinking the party could bring into the next election – especially when Labour’s deputy leader, Angela Rayner MP, delivers a keynote speech on the evening.

It was also hugely encouraging to see that IPSE research and ideas had influenced the final print, including tax deductibility for spend on learning new skills, improved parental leave and sick pay for the self-employed, ending structural unfairness in Universal Credit, supporting the growth of Work Hubs, and introducing more flexible long-term saving solutions for freelancers.

Yet more calls for a revamped training levy for freelancers

Artificial intelligence, and its impact on the world of work, is a topic that has been impossible to avoid recently. For freelancers, the topic is a reminder that investment in skills development and training will probably be a necessity to avoid being undercut. But these investments are often out of reach for freelancers, who can’t benefit from employer sponsored training as many employees do.

Alive to this challenge, the manifesto proposes reforming the much maligned Apprenticeship levy into a ‘Growth and Skills levy’, which would give levy paying firms more flexibility to invest in specialist training for contractors they work with. Revamping the levy is already official Labour Party policy, and we at IPSE certainly agree that fixing the Apprenticeship levy is the right place to start if we are to redress the imbalance in skills support between employees and freelancers.

With vast quantities of levy funds going unspent every year, why not redirect it towards our growing self-employed population? Ideally, freelancers would be able to dip into levy funds to pay for training they have chosen for themselves, being best placed to know what new skills and certifications they need to grow their businesses; this is a point we made in the 2019 manifesto and would certainly press it upon a theoretical future Labour government.

Ambition on freelance payment terms

Without a fixed salary, the self-employed naturally endure some financial instability – but overdue invoices amplify this ten fold, altering freelancers’ financial habits to such an extent that they feel obliged to maintain large financial buffers at the expense of saving more into a pension or investing in their business. That’s why, earlier this year, IPSE first called for the UK’s standard commercial payment term to be brought down to 30 days.

The Fabians’ manifesto doesn’t go quite as far as this, instead proposing that payments longer than 60 days would be deemed unlawful “except in tightly specified circumstances”. Drafted correctly, this legislation would have a similar effect to that which was passed in Belgium earlier this year, which makes longer contractual payment terms “unwritten” – i.e., having no legal standing. This would be a hugely positive step in the right direction and would put an end to ludicrous 100 day, 200 day and even year-long payment terms.

But there are two ways this progress could be tripped up; the first is the exception for “tightly specified circumstances” which, unless perfectly drafted, would no doubt be abused by perennial late payers. The second is the manner of enforcement; part of the problem today is that enforcing payment rights involves taking your client to court, burning any professional relationship you may have with them and taking you away from your business for the sake of being paid what you’re owed.

To be genuinely successful, commercial payment reform needs to be unequivocal in setting an appropriate standard payment term and take the onus off the freelancer to chase an unscrupulous client for money they’re owed with proper enforcement of the rules by government.

A bigger role for trade unions?

One of the bigger shake ups proposed by the manifesto would see trade unions given a vastly more prominent role in the growing ‘platform economy’; this includes protecting freelancers from repercussions for engaging in trade union activity, supporting collective bargaining by freelancers, and forcing platforms to hand over worker data to trade unions and forward union communications to their workforces.

The rationale for this kind of intervention is perhaps clearer on platforms where its users have mostly similar working conditions and assignments. But it’s more difficult to justify on platforms that operate more like online ‘shop windows’, particularly when the users maintain an independent business presence outside of the platform, such as their own website and client base.

There’s a potential role for collective bargaining when it comes to policies such as platform fees and payment schedules, but it seems needlessly burdensome to require those platforms to also share user data and create digital spaces for union activity.

There’s a clear need to define and differentiate between different types of platforms and their users – something which the manifesto’s proposed ‘Freelance Commissioner’ would presumably be tasked with achieving. But ultimately, it’s encouraging to see such developed thinking on the important policy challenges created by an increasingly platform-based economy.

Could the self-employed be the difference at the next election?

It’s clear that the left-of-centre bloc is realising the electoral opportunity offered by the self-employed. The Fabians’ manifesto articulates this through the scars left on the sector by gaps in support during the pandemic, shifting attitudes towards entitlement to greater protections in work, and their overrepresentation in groups most likely to vote in elections, with half of the self-employed population being aged between 50 to 69.

IPSE is not a party-political organisation, but we are nonetheless hugely supportive of efforts to create dedicated policy for the self-employed, particularly when there is a distinct chance it could be adopted by a major political party. Most encouragingly of all, the manifesto recognises and seeks to work with the range of statuses within self-employment, including sole traders, ‘freelancers’, limited company owners, ‘contractors’, and so on – rather than seeking to challenge or dismantle them.

Creating the next IPSE manifesto for the self-employed

As we continue building our own manifesto of ideas to revitalise UK self-employment, we’re asking our members about the issues they believe the next government – whichever party it may be – should tackle.

The process has already begun, with the first of our ‘Election 2024’ meet-ups in Glasgow, hosted in June by IPSE’s Director of Policy, Andy Chamberlain. We’ll be hosting more meet-ups like this across the UK throughout the year – be sure to stay up to date with our latest events by subscribing to our weekly newsletter to get involved in future IPSE policy events.

The latest schism within the Conservative Party

On the one hand, you have Rishi Sunak’s ‘pragmatic’ economic approach, grounded in a desire for stability. On the other, you have a growing caucus of Conservative MPs supportive of Liz Truss’s policies to bring about turbocharged growth and lower the tax burden.

Let’s not forget that Conservative members favoured the Truss approach. Rishi Sunak has the unenviable task of trying to appease the very base of his party that didn’t want him only one year ago. It’s this split within the party that is receiving column inches and captivating party members. But it also does nothing to endear the UK’s smallest business owners, who will no doubt be left frustrated by an apparent dearth of ideas to address many of the issues they face.

What happened at the Party Conference?

After days of speculation surrounding HS2, the Conference finally kicked into life with the re-emergence of Liz Truss at a packed-out event held by the Conservative Growth Group. This is a group of MPs – believed to be as many as 60 – that want to see an end to the current fiscal ‘status quo’ by reducing taxes and boosting growth with measures such as scrapping IR35.

At the event, prominent figures such as Priti Patel and Jacob Rees-Mogg stood alongside Liz Truss in calling for radical change to taxation and a desire to boost the UK’s economic fortunes.

But these sentiments are in sharp contrast to the main event; Rishi Sunak’s first conference speech since becoming leader.

Sunak passionately claimed that the Conservatives “will always be the party of enterprise, the party of small business,” although many of the UK’s 4.3 million self-employed will disagree.

Many will point to the imposition of the IR35 reforms – forcing a large proportion into an unregulated umbrella company market – as well as constant raids on dividend income and increases to corporation tax. For others, it will be inaction on late payment, training and skills, or gaps in support during the pandemic. After 13 years of Conservative government, the self-employed arguably feel more marginalised by public policy than ever before.

Sunak’s use of the phrase “it’s time for change” was also particularly interesting. It's curious that a party that has been in government since 2010 is advocating change. It's also curious that a current Prime Minister, with the power to bring about such change, offered no real insight into what this change would even entail.

Whilst we had some detail given on the plans to outlaw smoking and an overhaul of A-levels, there was also a glaring gap in his speech: a plan to support businesses and encourage growth. This would suggest that the PM is actually content with the current economic status quo and at odds with his assertion on bringing about change.

It’s official, the self-employed are deserting the Conservatives

It will therefore come as no surprise that the self-employed are now looking away from the Conservatives.

This sector is often considered to be a naturally Conservative electoral bloc, tending to favour pro-business and free-market policies. Therefore, the latest polling from the Centre for Economic Performance is particularly pertinent, revealing that just 19% of the self-employed intend to vote for the Conservatives at the next election. When the polling was carried out at the same time last year, this figure was 30%.

Instead, these findings now indicate that 36% of the self-employed intend to vote for Labour at the 2024 election, an increase on 34% from last year. The self-employed are also now slightly more likely to vote for the Liberal Democrats, unsure of their voting intentions or not planning to vote.

Ultimately, the polling provides a bleak snapshot for the Conservatives.

Perhaps it’s time they finally recognise the impressive economic contribution and entrepreneurial drive of the sector and embrace the self-employed in public policy. This sector is not only vital to the UK’s economic fortunes but also represents a significant voting bloc at the next election.