With trade union membership in decline and no career a sure path to prosperity any more, progressive political movements organised around the workplaces face an existential crisis. The question is: as more and more people are becoming their own boss, just what do we mean by “working class”?
For some of this new proletariat, being self-employed is realising a dream of independence. For others, there may have been little choice. Either way, one in seven people – nearly 5 million in total – are self-employed, and 60% of all private sector jobs come from small businesses. This trend is likely to grow, and Labour must work for these people if it is to retain its mantle as the workers’ party.
In my constituency of Walthamstow in northeast London, 13% of residents are now self-employed. Many are worried that working for themselves isn’t working for them – with good reason.
A music teacher who has been teaching on and off since she was 13 struggles to pay the bills when students are in short supply. A construction contractor’s clients won’t pay up even after the job is done. A freelance photographer worries about what she’ll do if she gets sick and can’t work. It’s not just the hours they put in that are tough. It’s having no holiday pay, no sick pay, no certainty of income. When they are paid, it can be below the living – or even the minimum – wage.
Independence and entrepreneurship are not easy at the best of times. With this Government’s Darwinian view of self-employment it’s getting harder. Tory proposals to increase national insurance premiums on these people in the last budget were the tip of the iceberg. A lack of action on late payments, and their decision to insulate the public sector from punishment for such behaviour, shows a failure to stand up for small business. We see the fallout from this failure: 50,000 small and medium businesses fail every year in this country from late payments alone. In Walthamstow, almost half of our 13,000 small businesses are chasing late payments to the tune of £56 million pounds every year. They are not alone. Nationally, £26.3 billion is owed across the UK.
Identifying the problem is – should be – the easy part. Our solutions need to reflect that the self-employed are both the employer and the employee. Rather than leaving them to sink or swim as the Tories have, Labour should create a rising tide to lift all.
That means we need both government and community action: the government to ensure a level playing field, and entrepreneurs themselves to share the risks and benefits of self-employment. The next government has to make sure the national Small Business Commissioner has real teeth. Give them the power to deal with late payments in the public sector. Force larger firms to comply with late payment investigations. Levy fines on those who consistently pay late.
In Walthamstow we are working with Community trade union and IndyCube, a coworking co-operative, to promote a union for the self-employed. Anyone can join and take advantage of services to get invoices paid on time and access legal advice. These are facilities none of them could afford to commission individually, but collective purchasing means they’ll all save time and money together. Next, the union is also looking at how, when things get tough and business is inconsistent, it can offer a surety as well as parental leave.
Basic services are just the start. We’re also working with Indycube to find premises where the self employed in Walthamstow can collaborate in person – whether in selling to each other, sharing basic business services or even just socialising.
In some ways none of this is new. Its an idea as old as the Labour movement itself. Organised self-employed people are the modern day Rochdale pioneers who first instigated the co-op movement in the UK.
In the 21st century, these old-fashioned values are vital, helping the public take back control of their own working lives.
The invisible hand of the market can be an unforgivable fist – or it can be shaped into a helping hand that guides trade for the benefit of all.
It is for Labour to show that a prosperous future for Britain lies not just in creating the right environment for our strategic industries to grow. It is also in investing in and protecting the self employed – the economic centre of gravity of our communities and, with our support, the engine of social enterprise.
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