Clearer rules for self-employed will create more jobs

When I worked in Downing Street I never had any trouble getting to sleep. Now that I run my own small business, things are very different.

There’s always something to keep you awake fretting — especially when the future is looking unclear.

Obviously there’s not much the Government can do to ensure you get a decent night’s rest. But political leaders can make a big difference by trying to minimise uncertainty and creating a predictable policy environment that gives companies the confidence to invest in the future.

A great example is California, whose tough regulations on car emissions have provided manufacturers with clear long-term rules so they know exactly what standards they have to meet. This has unleashed huge amounts of new investment and helped give rise to electric car companies such as Elon Musk’s Tesla Motors.

As a result, more than 400,000 jobs have been created in California’s green technology industries — far more than any other state in the US.

Compare this certainty with the shifting legal position of self-employed workers in the UK, whose rights and responsibilities are incredibly unclear after another court ruling, this time against Pimlico Plumbers last week. (This case follows a separate judgment against Uber last October.)

This confusion isn’t the fault of the courts — judges are stepping in because there’s inadequate clarity from the Government about precisely what the rules for self-employed workers should be.

There’s little excuse for this policy haze given that self-employment is such a major feature of the modern British economy.

One in seven people working in the UK today is self-employed, and this percentage is even higher in London and the South-East. There are now more than 4.6 million self-employed people in Britain, and self-employment is particularly prevalent among older people, accounting for almost half of all workers aged over 70.

“Ambiguity over the rules will undoubtedly deter some people from becoming self-employed and put companies off contracting freelancers, for fear of falling foul of fluctuating regulations.”

Ambiguity over the rules will undoubtedly deter some people from becoming self-employed and put companies off contracting freelancers, for fear of falling foul of fluctuating regulations.

Given that half of all new jobs in the UK since the financial crisis have been in self-employed roles, this uncertainty could have a major negative impact.

Now is the time for the Government to do the right thing and make it clear that self-employed workers must have access to paid parental leave, social insurance in case they get sick and other rights. This would clear up the uncertainty at a stroke and give businesses the assurance they need to get on with creating new jobs.

While they’re at it, my former colleagues at No 10 might as well deal with the other complexities that make life hard for self-employed workers, such as the unfair way that landlords often force self-employed workers to pay much bigger deposits, and the extra obstacles faced when trying to secure a mortgage from a bank.

We live in an uncertain world. No one can predict how Brexit will turn out, or what will happen to the global economy in the years ahead.

But the ambiguity over self-employment rules can easily be sorted out — and millions of British workers stand to benefit.

If we can get this right for the long-term, we’ll have more jobs as well as stronger and fairer workers’ rights.

Maybe it’ll even mean more self-employed people can sleep soundly at night.

By Rohan Silva
Originally published at www.standard.co.uk on February 13, 2017.

Second Home is a creative workspace and cultural venue based in London and Lisboa. We bring together diverse industries, disciplines and social businesses. Find out more about joining us here: secondhome.io