This article was first published on the Telegraph on 11 August 2014.
This hidden group are the self-employed. They are carers and consultants, construction workers and chemists. And they play a crucial role in the British economy.
Since 2010, 38 per cent of the growth in people in work has been accounted for by the self employed. Many have prospered. But too many have struggled to make ends meet. Self-employed people have been hit harder by the cost-of-living crisis than other workers with their income falling by £2,000 on average since 2010.
We passionately believe that the values that the self-employed embody - entrepreneurialism, determination and creativity must be encouraged and backed by government. If we are to build a high-skilled, high-wage economy that works for everyone, we need to ensure that the self-employed are included and supported
But under David Cameron, too many self-employed workers are being left behind.
According to the IFS, gross income among the self-employed fell by 14 per cent between 2009/10 and 2012/13, compared to a fall of 9 per cent for overall earnings. And falling wages have big consequences.
Self-employed workers are working harder for less which leaves many struggling to pay the bills.
So taxpayers are spending more and more on benefits to support working people who can’t make ends meet. The average amount of tax credits paid to a self-employed person is £1300 higher than that for someone in employment. And last week new analysis by the House of Commons library found the number of working people claiming housing benefit is set to double between 2010/11 and 2018/19 because they can’t afford to pay the rent.
It’s time for the government to stand up for the self-employed and ensure they are given the support they need to succeed. But instead, for example through Universal Credit, they are burdening self-employed people with unnecessary red tape.
We need to ensure self-employed people get the recognition they deserve so the time has come to properly reflect the rise in the number of self-employed people in the statistics which inform policymaking. As a start, their income could be included in the monthly pay figures produced by the Office for National Statistics, and alongside this we need new ways of measuring the earnings of the self-employed, recognising their contribution to the British economy.
That’s why today we have written to written to Sir Andrew Dilnot to urge him to change the rules and treat the self-employed like other workers.
In coming months we will be looking very closely at how a future Labour government can help self-employed workers prosper and ensure they are given the support they need to succeed. Only by taking the growth in self-employment seriously can we build an economy that works for everyone.
This was a joint article with Rachel Reeves MP