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Could lockdown's legacy for the self-employed pave Labour's path to power?
- 20 Jul 2023
Call us biased, but IPSE has always recognised that the self-employed are an electoral force capable of making or breaking a party’s electoral fortunes (it’s why we called our 2019 manifesto ‘#5millionvotes’). 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.
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