IPSE: The government should be thanking the self-employed

Date: 12 December 2018

IPSE: The government should be thanking the self-employed

The rise in the number of people working for themselves has helped to take employment levels to new heights, says IPSE.

The latest data from the Office for National Statistics (ONS) shows that the UK employment rate is now 75.7%, the joint-highest level on record. However, much of this success has been driven by the huge rise in the number of self-employed people.

The ONS figures show that the number of freelancers has stabilised at 4.8 million; however, as freelancer body IPSE points out, the number of people working for themselves has gone up by over 2.5 million in the past ten years.

"When the figures are analysed, it becomes clear that the extraordinary rise in self-employment has made a huge contribution [to employment figures]," said Andy Chamberlain, IPSE's deputy director of policy.

"The government should be thanking the self-employed," he said. "It can do this by reconsidering its policies on IR35 and universal credit, both of which will unfairly disadvantage people who have taken the initiative and struck out on their own."

A report published last week by IPSE and People Per Hour has found that self-employed confidence has dropped nine points in the past quarter and the biggest fears concern government fiscal policy - likely to be focused on changes to IR35 off-payroll tax rules.

Freelancers' low confidence has been exacerbated by a fall in day rates and quarterly earnings. The demand for freelancers' work has also declined by 0.2 weeks since the beginning of the year. In Q3 2018, freelancers saw their average quarterly earnings fall by almost £400 compared to the previous three months.

Among freelancers in professional occupations, however, there has been an increase in quarterly earnings. Average day rates among associate professional and technical freelancers have increased too. Most freelancers (67%) also believe they will recover some of the recent losses in day rates over the coming year, with an average expected increase of 8%.

Suneeta Johal, IPSE's head of research, education and training, said: "From the figures, it looks almost certain freelancers' confidence took a hit because they believed the government would be pushing the disastrous changes to IR35 into the private sector. And they were proved right ? Unless the government wants confidence - and performance - across the freelance sector to drop further, it must scrap the plan to extend the changes to IR35 into the private sector and secure a Brexit deal that works for the self-employed."

Xenios Thrasyvoulou, founder and ceo of PeoplePerHour, said: "The government has a lot to answer for when it comes to freelancer confidence and the uncertainty they are feeling going into 2019. More clarity and support for the self-employed is a must to increase confidence and productivity for this important sector of the UK economy."

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