Self employed - the missing million

There’s an interesting piece in the Financial Times earlier this week, here , about the sizeable drop-off in numbers of self-employed. I’ll try and summarise rather than copy author Sarah O'Connor's work without respect for the FT as copyright holder.

After the financial crash in 2009 – 2019 solo self-employment accounted for a third of all employment growth in the UK. The highest in the OECD.?

I think we all know the reasons for this: gig economy; the semi-retired boomers running portfolio careers, and a rise in contracting in growing sectors like creative industries, IT and finance, lorry driving, and construction.

But since 2020 there are 800,000 fewer self-employed according to the ONS. A lack of Covid support sent the numbers spiralling initially. But there are a variety of other reasons for that too – a clamp down on ‘bogus self-employment’, especially amongst contractors, but also people taking permanent jobs for security in the midst of this cost of living crisis. On the supply side, there's also a real clamour for skilled staff after Brexit. Personally, I think that probably understates the case, it will be more like a million as people are taking full-time status and trying to make their tax status simpler.

Mixed into all of this is yet another piece of missing government work that has been kicked into the long grass while we appear to have no functioning government. Matthew Taylor's review of work was in 2017, the government's Good Work Plan was published in 2018. The responses to both of those pieces of work from a variety of organisations (including my trade union Community Union , and my former colleagues at the ICAEW ), are now going curly at the edges on a shelf at whatever the government department is called that used to have Industrial Strategy in its title.

None of that deep thinking should be going to waste. The ICAEW laid out a fairly blunt message in May that the continual court cases on employment status and IR35 just served to prove that the present system isn't sustainable. Backing up the work of Community, Prospect and the FSB in their enquiry at the heart of lockdown that pleaded with the government to take employment rights for the self-employed seriously. I was on a call last week with Community Union about work where we talked about mutual support, cranking up the campaign on IR35 and protection at work for contractors, balanced with an ever more vigilant approach to tax compliance from a very stretched HMRC.

Despite this drop-off, the self-employed, freelancers and contractors still represent 4 million people in the workforce. I'm grateful to the FT for raising the issue. Self-employment, multiple jobs, side hustles, and businesses on the side are going to be an ever more common feature of a complex world of work. This goes way beyond the chatter about working from home which has been weaponised as a culture war issue. The conversations I've been privy to on Labour's thinking on work and an industrial strategy are encouraging. But it's up to business organisations, unions and anyone thinking about the future to grip this.