Freelance body warns of ‘worrying labour trend’

Anti-freelancing policies by the government are starting to decrease self-employment at the same time as increasing unemployment, a trade body warns.

Raising the alarm over a 59,000 annual fall in self-employment coinciding with a 21,000 quarterly rise in joblessness, IPSE said IR35 reform and Brexit were to blame.

Addressing those it deems responsible – policymakers, the Association of Independent Professionals and the Self-Employed (IPSE) said that they “should take careful note of what could be the start of a worrying trend.”

For example, the rise in unemployment is the first increase in the joblessness rate since January 2018, and the fall in self-employment represents the second in succession.

'Suffering'

Both fluctuations were reported this week by the Office of National Statistics, but IPSE also shared anecdotal evidence that help show why self-employment is dwindling (to 4.75m) .

“The self-employed are suffering from a decline in confidence and earnings,” said the association’s Andy Chamberlain.

“[And their] confidence in the economy overall remains very low, which is due in no small measure to the lack of a clear plan for the UK’s exit from the EU.”

'Disappointing'

This lack of clear plan was red-flagged as worrying freelancers in IPSE’s first quarter confidence index, ahead of it inspiring a call by the FSB (that remains unanswered), to help sole traders with borders, burdens and costs.

Similar concern about the fate of freelancers post-Brexit remains, as creative industries group CIF, which has requested two freelance-friendly visas, says the government’s immigration plans for Britain’s withdrawal from the EU remain “disappointing.”

But IPSE believes that the blame for both self-employment falling and unemployment rising sits with “damaging” government policies as a whole, not just those related to Brexit.

'Major worry'

For example, it has described the government’s IR35 tax policy – reform is planned for 2020 –as  “a major worry” for self-employed people who operate via companies.

“Against this backdrop [of both IR35 reform and Brexit], it is unsurprising that the total number of self-employed is falling,” Mr Chamberlain said.

“The fact that unemployment has also risen should be a red flag to policymakers. If the self-employed are discouraged from working for themselves by ill-judged policies like IR35 and Universal Credit, it is likely to mean further rises in unemployment.”

 

15th November 2018

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