Government Support for the Self-Employed

I was interested to read on the BBC website about a report commissioned by the government which recommends more support for the self-employed. Having recently had a taste of the fragility of the status after being (thankfully only for a short time) unable to work through illness, I wondered what they had to say.

In fact, most of the issues being raised don’t apply to me. I’m unlikely to need paternity pay or adoption allowance any time in the foreseeable future, whereas if I needed maternity leave I could probably make plenty from selling my story.

Nevertheless, the principle is still important, and other suggestions may be more relevant to me, such as encouraging banks to offer flexible mortgages to self-employed people who can’t demonstrate a regular monthly income.

The report claims that a record 15% of the UK workforce is now self-employed, though it’s not made clear what definition of self-employed that uses. Many small business owners create a limited company, in which case they’re technically an employee of the company they also own, even if they’re the only one. Strictly speaking, there’s no difference whether you have a one-man-band outfit or whether you’re Richard Branson.

It certainly does seem that self-employment is on the rise. It used to be normal in certain occupations (plumbers, electricians, window-cleaners etc.), but the range of sectors where self-employment is now possible has ballooned. A good deal of this is down to the internet, which has made it so much easier for many people (copywriters, for instance) to operate with minimal overheads.

According to the BBC, “Some analysts have suggested that many of the newly self-employed are people who have lost their jobs as a result of the recent financial crisis and would prefer to work for an employer.”

I can certainly vouch for the first part of the suggestion, but I can’t say I’ve met many self-employed people who are longing to be back in traditional employment. Self-employment isn’t easy and doesn’t always succeed, but I think few people who make it work would want to give up the independence and self-determination it gives. I certainly wouldn’t.

The report recommends early support, like teaching bookkeeping and tax in school, but I’d suggest Jobcentres also need to be more proactive about making it clear that self-employment is an option. Most of the assistance is outsourced (like Wenta, without whom I would never have got off the ground) and only available if you ask for it.

In the same way, ongoing support for self-employed people is very much focused at a peer level, through organisations like the FSB and business networking groups. If the government is serious about easing the unemployment burden by encouraging self-employment, they need to offer more support and advice for getting people through those difficult first years, as well as equipping the next generation before they enter the market.

It’s unlikely that self-employment is ever going to replace traditional employment, since there are many industries that need the organisation and resources of a large company. But, as technology like the Internet of Things allows more and more industry sectors to work on a small, independent level, self-employment is going to become a significant factor in the economy. It’s time the government treated it as such.

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