Are we providing enough security for self-employed people?

Alison Blackwood, Senior Campaigns Officer

“The first task of a One Nation Government is to help all working people have security” – this was David Cameron’s introduction to the Queen’s Speech at the end of last month. With more and more people taking advantage of the flexibility and other benefits of self-employment in the UK (now standing at 15% of the workforce), it is important that their needs around the security of work are included in this help.

While the Government has announced an Enterprise Bill which aims to “reward entrepreneurship, generate jobs and higher wages for all”, this concentrates on providing more government support for small business development, but it doesn’t necessarily address the security of the self-employed working people who run these enterprises. We want to make sure that people get the support they need to develop their business to its full potential.

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Is it a problem for Citizens Advice clients?

Local Citizens Advice are seeing a rising number of clients asking about self-employment issues. In 2014-15 over 56% of these self-employed clients were earning below the national minimum wage for a 35 hour week. This mirrors national data suggesting that self-employment is increasing, while the average income of a self-employed person is falling. At the same time self-employed people don’t have access to some of the benefits and rights that employees enjoy, such as sick pay, holidays or pension auto-enrolment.

Some Citizens Advice clients were victims of unscrupulous employers who were telling their employees they were self-employed, in order to dodge the burden of employer national insurance contributions. Such employers reduce taxation revenue (estimates suggest by billions of pounds) and reduce the competitiveness of the vast majority of good employers, who abide by the law.

In other cases, genuinely self-employed Citizens Advice clients who were earning little were not receiving the same benefits or rights as long-term employees with regular, predictable earnings. This provides little incentive for people to start new businesses, particularly if they know these will take a while to turn a profit.

So, do we need a national campaign?

Self-employment is, for many people, a positive option but with the number of people working for themselves growing substantially, it’s vital that this group gets security in work. We have collected diaries from self-employed people which highlight their feelings of insecurity. More recently, we have been carrying out more detailed research into self-employment and the issue of people being told that they are self-employed when they are legally employees. We will be publishing our findings throughout this summer. This research will form part of the evidence we are currently gathering for a national campaign to lobby for positive change for self-employed people.

Some of the areas we’re looking at include:

  • delivering the security that self-employed workers need in order to continue to develop their business at the same time as having children and providing them with a good family life
  • more support and security for the low-paid self-employed to help them to develop their business into a profitable enterprise; and
  • more effective measures and better protections to stop rogue employers exploiting employees by falsely claiming they are self-employed

Please let us know what you think

If you are interested in finding out more about this scoping work or would like to become involved in a national campaign around self-employment issues, please contact Alison Blackwood (alison.blackwood@citizensadvice.org.uk). If you would like to know more about our current research into self-employment, please contact SJ Jacobs (sj.jacobs@citizensadvice.org.uk).

Alternatively, let us know what you think by commenting below. We’d really like to involve a wide range of people with different experiences in developing our thinking on self-employment issues.

2 comments

  1. Angela Harding

    I hear of so many employers using ‘Umbrella’ organisations so their ’employees’ are self employed. Most of these ‘self employed’ have no rights and are in a very precarious position. I pray against the exploitation of people. When these people move into proper employment they have a nightmare sorting out their tax position. I also am dubious about a lot of agencies handling the ‘tax affairs’ of these so called self employed. I was talking to a taxi driver who had no idea what the ‘umbrella organisation’ did with their money. It is a very worrying back door form of reducing labour costs without the ’employee’ realizing that their hourly rate needs to cover sickness cover, holiday pay and any other paid rights of an real employee

  2. vincent johnston

    Vincent Johnston In a word NO , especially in the building trade , decrecreasing prices lead to , virtually a zero hours contract , each company holding guys to ransome , forceing them to cut corners regarding , health and safety. Going 714 , in times when the country is on its knees , is not advisible.

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