Six policies to support the self-employed - RSA

Six policies to support the self-employed


  • Picture of Philip Ross
    Philip Ross
  • Mutualism
  • Economics and Finance
  • Employment

With the number of people now working in self employment growing every day it is surprising that the General Election hasn’t focused on them more. We have had from each party something of a nervousness on the subject. There have been strong words around the issues of bogus self employment and the gig economy and promises to extend rights to the self employed. Not all the self employed need offers of salvation but they do need help.

The Parties all need to recognise both the growing size of the self employed workforce in the UK economy and to value the contribution that they make to it. They need to recognise that they are both generators of economic activity and also help to enable other businesses to grow and develop.

It is estimated that the self employed will soon number 5 million. The Parties should be committed to clamping down on bogus or forced self employed but recognise too that the vast majority are legitimately self employed and require proper recognition and support. They should note too that the self employed workforce varies from independent professional through to lower paid precariat workers. A one size fits all approach on policies will not work but the principle of supporting the self employed does hold true.

We need a fair market that operates as much in the interest of the self employed as they do for the companies using them.

I propose a series of policies that will help empower the self employed both commercially and socially. Helping them operate successfully in business but recognise that they stand alone and need help to organise and co-operate with others.

In short the proposal features steps to help them be recognised, to be organised, to co-operate with each other and to share their knowledge.

1 - Introduce a version of the USA inspired Freelancing Isn't Free Act to help gig workers be paid on time and have a contract. Configure it such that it allows workers to get trade unions to modernise and help collect late payments for them. (As explained here)

2 - Provide transparency to remove profiteering by third parties. How can it be that when buying any financial product the commission taken by a third party can be seen? How can it be in a self employment or temp worker relationship this remains hidden? The solution is to legislate for transparency, elsewhere in business this is known as open book accounting, which is simply a mechanism for fairness through transparency to the self employed and temporary workers.

In practice, this means making agencies disclose to workers the margins they charge (difference between what a client is paying and what the worker receives), and showing anything they receive from referring them to other providers eg a payroll company.

3 – Help the self employed to co-operate with each other by removing any impediments to help the self employed combine for support through co-ops and in using shared spaces like in Belgium and France

4 - Create a new company form to help the self employed. In past years Parliament created limited liability partnerships and community interest companies. We propose a limited liability company for the self employed like the Freelancer Limited Company proposed by LFIG before the last election, or the variant suggested by IPSE.

5 - Without assets the self employed find it hard to borrow so they can grow their businesses. To resolve this we should introduce the continental idea of Mutual Guarantee Societies, as suggested by Christine Rees MP in her recent private members bill.

6 - The self employed will always struggle with sick, maternity and paternity pay. Build solutions around this, for example by allowing for the introduction of Breadfunds that are used in the Netherlands.

Philip Ross is a freelance business analyst. He was a founding member and Director of IPSE (the freelancers’ group) in 1999. More recently he was a co-author of the influential ‘Not Alone’ report published by Co-ops (UK)

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