‘The government’s workers’ rights agenda must include self-employed people too’

The Employment Rights Bill will be one of this government’s most significant achievements, improving the rights of millions of employees. Trade unions fought hard for it, and thankfully it is now back in its final stages, after the Lords held it up. 

Now though, the government must improve protections for those whose working conditions this Bill doesn’t include – the self-employed. 

The self-employed make up more than four million people in the UK, 13 per cent of those in work. They dominate important sectors, from the creative industries to construction. Their full-time average net income is 12 per cent lower than for full-time employees. 

The government is taking forward important reforms that will benefit self-employed people. Theseinclude the right to a written contract; tackling late payments; extending health and safety and blacklisting protections; reforms to employment status; and creating a ‘Freelance Champion’. But this important part of the workforce needs more, and there is a risk of a widening ‘rights gap’ between employees and the rest of the workforce.

READ MORE: ‘To deliver day-one rights, unions like mine chose strategy over stalemate’

Income protection is particularly important for self-employed people. They get sick, have children and retire just like employees. But when they do, their income drops off a cliff. Inadequate sick pay means the average full-time self-employed worker loses 81 per cent of their income if they don’t work. This thenincreases the likelihood they will come to work sick –working less productively, while spreading viruses to others. 

Self-employed parents get a particularly raw deal. The maximum maternity allowance is just £187 per week for 39 weeks. And with just 10 ‘keeping in touch days’, many self-employed people struggle to maintain crucial client relationships. Paternity leave is non-existent – meaning only 31 per cent of self-employed fathers took time off following their child’s birth, according to TUC research. The upheaval in their working lives is stark. Just 24 per cent of mothers who were self-employed before their child’s birth remained so three years later (compared with , 56 per cent of fathers).  and 26 per cent were out of work. Pensions are another area where self-employed people need support. The vast majority of self-employed people are not on track to meet the income they need in retirement. This is storing up a huge problem for the state pension – which will come under pressure to prevent looming pensioner poverty among the previously self-employed.The NHS too will face increased pressures due to poverty related conditions being exacerbated for this group.

Subscribe here to our daily newsletter roundup of Labour news, analysis and comment– and follow us on Bluesky, WhatsApp, X and Facebook.

Income protection is clearly important, but the self-employed need a different kind of support. They work very differently – usually with greater freedoms over how and when they work, and they pay lower national insurance. But that doesn’t mean the government should wash their hands of responsibility for them. They are still workers and many are in precarious circumstances and on low incomes. 

In our new Fabian Society report, we set out some options the government should consider. For sick pay, the government could learn from Canada, and back an opt-out sickness insurance scheme – funded both by the self-employed and the organisations they work for. For parental leave, the government can learn from European countries and provide an income related maternity allowance for longer; create a new paternity allowance; and increase the number and flexibility of vital ‘keeping in touch’ days. And to increase pension contributions, the government could look at the auto-enrolment policies of countries like Lithuania or Chile, and create new savings products to replace Lifetime ISAs and promote pensions and savings uptake too.

Thankfully, most of these measures don’t cost other taxpayers much at all. These options are mostly funded by self-employed people themselves. Parental leave would cost a relatively small amount, but it is such an important benefit for the welfare of children and new parents that it is surely justified.

Share your thoughts. Contribute on this story or tell your own by writing to our Editor. The best letters every week will be published on the site. Find out how to get your letter published.

When the Employment Rights Bill is finally passed, the government will need to follow through and deliver the rights it promises for employees. This will demand the time and continued hard work of trade unions and politicians. Alongside this, the government must also start improving income protections for self-employed people too. If they want to make progress by the next election, that work must start now.

• • SHARE: If you have anything to share that we should be looking into or publishing about this story – or any other topic involving Labour– contact us (strictly anonymously if you wish) at [email protected].
  • SUBSCRIBE: Sign up to LabourList’s morning email here for the best briefing on everything Labour, every weekday morning.
  • DONATE: If you value our work, please chip in a few pounds a week and become one of our supporters, helping sustain and expand our coverage.
  • PARTNER: If you or your organisation might be interested in partnering with us on sponsored events or projects, email [email protected].
  • ADVERTISE: If your organisation would like to advertise or run sponsored pieces on LabourList‘s daily newsletter or website, contact our exclusive ad partners Total Politics at [email protected].