The gig economy
The shape of Britain’s workforce has changed dramatically in the last 40 years, said John Harris in The Guardian. In 1975, only 8.7% of the workforce was self-employed. Now, it’s nearly 16%, and rising, thanks to the growth of casual labour, and the expansion of platforms such as Uber, Deliveroo and Amazon. Today, the 4.8 million self-employed include “a great crowd of IT contractors, plumbers, hairdressers, cab drivers, cleaners and accountants”. But for many, this is a precarious existence: they have no paid holidays or sick leave, and no employer pension contributions. Hence the fury last week when Chancellor Philip Hammond implied that the selfemployed were “freeloaders”, and hiked their National Insurance payments. Hammond “stepped flat-footed onto a political landmine”, said Trevor Kavanagh in The Sun. He penalised the strivers: those who risk their own cash and work all hours to make ends meet. He declared war on “White Van Man”. No wonder he was soon forced into a sharp U-turn.
The move was a political misjudgment, said the FT, but it was entirely justified. “The UK levies much lower taxes on the self-employed than it does on employees. This creates undesirable incentives.” Some firms push people into self-employment to avoid having to give them benefits and lower their own NI bills. The much lower tax take for the self-employed also poses an “ever-growing risk to our public finances”, said Torsten Bell in the New Statesman. Hammond’s 2% increase in National Insurance contributions for the self-employed was a modest step towards putting this right; besides, his reforms would have exempted those earning less than £16,250. “There is an idea abroad” that the self-employed are some sort of “uniquely honourable” group, whose entrepreneurial instincts should be “rewarded with special indulgence by the rest of society”, said Sean O’grady in The Independent. They’re not. Some are deliberately lowering their tax bills. The rest are no better than the rest of us. “They drive their white vans on the same roads as employees, they use the NHS the same as their employed neighbours.” They should pay their fair share.
The problem is that Hammond made the self-employed feel like “shysters”, said Janice Turner in The Times. They are “eroding the tax base”, cried Theresa May. In fact, whether they’re a “booted-out, mid-rank, fiftysomething executive forced to wangle scraps from old contacts”, a Yorkshire miner driving a minicab, or a young person negotiating the “gig economy”, they’re often at the sharp end of modern work. They have both advantages, such as flexibility, and great disadvantages – no parental leave or job security. The Government has commissioned a review of employment practices, which is likely to recommend both higher taxes and increased benefits for the self-employed. That would be a fair trade-off. “Instead, the stick was brandished before the carrots were even sown.”