Economy 10 March 2017 In defence of the self-employed Most freelancers are not management consultants - and they don't even get sick pay. Getty Sign UpGet the New Statesman\'s Morning Call email. Sign-up Tell me, Philip Hammond; how do you encourage enterprise, resourcefulness and self-reliance in our new Brexit economy? Do you encourage workers who take time to skill up, harness new technologies, disrupt established practices and take risks to move our economy forward? Or do you hit a significant proportion of them with the blunt instrument of a tax hike? As a personal finance commentator (and freelancer), I feel Hammond’s stance makes no real fiscal sense. The self-employed are the fastest growing section of our workforce. They constituted 3.8m workers in 2008, but have risen to 4.6m today. They make up 15 per cent of the workforce and 45 per cent of all employment growth since the financial crisis. For a government obsessed with inefficiencies and those that supposedly take out less than they put in, effective freelancers are surely model citizens. They put less pressure on our commuter routes. By working remotely, they can move to cheaper parts of the country, generating much-needed local economic activity and putting less strain on our housing hotspots. But no. Tradespeople, taxi drivers, entrepreneurs – the huge contribution they make and the tough, precarious lives they often lead has just been reduced to how much less they pay in national insurance contributions compared to employees. Hammond has portrayed the decision to hike Class 4 national insurance contributions for the self-employed as closing off a tax loophole. And undoubtedly, the well-off self-employed will face the highest bills. A management consultant earning £51,200 can expect to be £620 worse off each year. But let's be clear - most self-employed workers do not fit into this category. As Wes Streeting, Labour MP for Ilford North, points out, anyone earning £20,000 would see their NI bill go up by £240 a year (and this is likely to affect a huge number of his constituents, who are black cab drivers). Average wages in the UK are around £26,000, and while the average self-employed income is £13,500, official statistics also show that so-called White Van Man makes "profits" (income after expenses) of between £21,000 and £30,000 a year. If you are self-employed and on £25,000, just below the average employed salary, your tax bill goes up by £339 a year. The government is also obsessed with productivity and absenteeism. Here's the ironic thing. Freelancers get sick like everyone else, but they simply can't afford to take time off work when they have no sick pay to fall back on. No matter that workers not only get a state pension but also a workplace pension, with employer and government contributions. No matter that our generation is likely to receive a far smaller state pension than babyboomers retiring today, and will certainly have to wait longer for it. Around three quarters of national insurance contributions are effectively funding today’s triple-lock guarantee, regarded by economists and MPs as unsustainable and unfair to current taxpayers. And I would argue that its big business – not the little man – that’s avoiding its fair share of tax. Employers are exploiting freelancers to get around their requirement to pay national insurance, pension contributions and benefits. They take you on as long as it suits them, to avoid the cost and hassle of hiring someone full-time, before dropping you again when it looks like you might start expecting some rights and security. Meanwhile, you’ve had to shut off all other potential sources of income. The government has promised there would be a crackdown on this behaviour, but so far all we have seen is a vague promise from HM Revenue & Customs to investigate blatant offenders. And as for zero hours contracts? Not a word about them in the Budget, despite nearly a million people being on such deals. Good to know that we’re all in this together. Iona Bain is a freelance financial journalist and the founder of the Young Money blog. › How George Osborne accidentally laid a trap for his own government Subscribe For more great writing from our award-winning journalists subscribe for just £1 per month!