Standing up for the self-employed

By Rachel Reeves and Chuka Umunna

Becoming your own boss and starting out as self-employed takes determination, energy and endeavour. More and more people are taking this step – for many different reasons. Increasingly self employment offers a route for many for fulfilling their aspirations and dreams, whilst often allowing for greater flexibility in managing time and fitting work around responsibilities such as childcare commitments. Self-employment now accounts for almost one in six of Britain’s workforce.

The entrepreneurial spirit reflected by the increase we’ve seen in self-employment is to be welcomed. But under the Tory-led government, those in self-employment have been hit even harder by the cost-of-living crisis than employees.

While self-employed posts account for almost a third of new jobs since 2010, self-employed incomes have fallen by £2,000 on average. The gross income of self-employed people fell by 14% between financial year 2009/10 and 2012/13 compared to a 9% fall in the gross earnings of employees.

And the monthly Labour Force Survey statistics, published for August tomorrow, do not include details on self-employed earnings, thus effectively ignoring a large – and increasingly significant – element of our workforce.

To reflect the increase in the number of self-employed people, we must ensure that their contribution – as well as the challenges they are facing as part of the cost-of-living crisis – are properly reflected and taken into account.

That’s why we’ve written to Sir Andrew Dilnot, Chair of the UK Statistics Authoirity, to ask him to examine whether it would be feasible to publish self-employment income alongside the monthly Labour Force Survey and what further measures might be needed.

Today we’ll be meeting some of those who’ve taken the plunge and become their own boss at London’s Camden Collective, an innovative business hub project providing work space, facilities and support to help people make their ideas a reality.

We need to do all we can to support self-employed people, but under the Tory-led government things have gone into reverse. Its flagship Universal Credit will create huge new bureaucratic burdens for self-employed people in receipt of social security payments, meaning that instead of submitting one annual account they will need to submit twelve, using a completely different system from that which HMRC uses. As we’ve called for, Ministers must act urgently and think again on the mountain of red tape they are about to burden self-employed people with.

To build the high-skilled, enterprising economy we need to see and win the race to the top, we simply cannot afford to see the ingenuity and enterprise of self-employed people stifled as it has been under this government. The contribution of anyone becoming their own boss should be properly recognised and they should be helped to succeed.

Chuka Umunna is Shadow Secretary of State for Business, Innovation and Skills. Rachel Reeves is Shadow Secretary of State for Work and Pensions