Why self-employment can’t afford just to be about self

Self-employment. It is an aspiration for many – and is seriously on the rise. In the UK there are 4.6 million self-employed, and 27% of the employed would like to join them. Predictions suggest that by 2018 there will be more self-employed in the UK than public sector workers.

You may ask what’s the issue if people are turning their aspirations into a reality? But delving deeper you discover self-employed and short-term contact workers who aren’t earning big money and often find it hard to accumulate any assets – let alone get a mortgage and buy a home. And what about support around areas such as tax, benefits or pensions.

I’ve spent the last year working on a Co-operatives UK-led research project titled Not Alone. My colleagues and I have examined the needs of the ‘self-employed precariat’, including help with admin, access to finance and credit control, shared workspace, legal assistance and more. We also looked at examples around the world of how co-operatives, mutuals and trade unions provide these services, as well as representing the precariat to government.

We concluded that if precariat workers don’t come together to help each other, then the private sector will increasingly provide such services (at a price) and get an even firmer grip on this sector.

It’s ironic that while researching the problems of this growing group I hit my own difficulties. I’m a freelancer and have had issues with HMRC’s mix of awkwardness and incompetence going back decades, so I wasn’t surprised when they got it wrong again. This time they tried to charge me interest for late tax payment – caused by their delay in calculating my tax! My MP has now sorted it, but it was a personal reminder of why the self-employed would benefit from some form of mutual support system.

‘If precariat workers don’t help each other, the private sector will

increasingly provide such services and get an even firmer grip on this sector’

We already have employment agencies taking a commission on placing people into short-term contracts and the likes of Airbnb and Uber dominating what they call the sharing economy. In reality though, the only sharing is done by the owners of such companies – sharing out their profits from the commissions they take. In a mutual or co-op this would be genuinely shared among the precariat workers themselves.

Across the globe alternative solutions can be found. The CAE (Cooperatives d’Activités et d’Emploi) movement in France, where the self-employed are helped not only to make the transition from unemployment or the informal economy, but which also supports them with back-office paperwork, smooths out their cash-flow, and provides many of the workplace rights and benefits enjoyed by the employed, such as sick pay and pension contributions. There are now 72 CAEs across France and many also provide shared workspace, tolls, and other facilities – and encourage members to work together to secure larger contracts.

SEWA, the Self Employed Women’s Association, was established in India in 1972 as a trade union by Ela Bhatt and has over 1.7 million members. One of its most successful projects is the SEWA bank, a co-operative savings and loan institution set up to tackle the usurious interest rates charged to sole traders by money lenders. In 1997, SEWA convened an international event to foster research on informal workers. This led to the establishment of WIEGO (Women in Informal Employment, Globalising and Organising) as a collaborative project. Based in Manchester, it now has groups in 40 countries, 32 institutional and 142 individual members.

Pioneered in the Netherlands in 2006, bread funds provide sick pay to the self-employed. At the start of 2016 there were 170 funds in 88 towns and cities, with more than 7,000 members in total. Each fund has between 20 and 50 members who put money aside each month into their individual account. This money remains theirs and is used to support themselves and fellow members if they fall sick.

These examples show how things could be different here in the UK – if the co-operative movement developed solutions in partnership with trade unions to produce a solidarity economy. Both movements share a common culture of worker self-help, people-based democracy and mutual ownership that is radically different to the PLC culture of shareowner power. A number of the smaller trade unions in the UK already offer services tailored to their self-employed members – and some are starting to look at union co-ops as well. There is considerable knowledge of what works and it is starting to come together to build new relationships. This is a trend that is starting to accelerate, but still needs a support to ensure it grows.

  •  The report Not Alone, published by Co-operatives UK, is available here


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Stephen Horscroft
Stephen Horscroft
8 years ago

Alex, a great article and congratulations on your MP sorting out the problems you face. When DWP sent HMRC details of a disabled person’s income and the latter claimed they had not received it (when DWP were adamant that they did) HMRC subsequently stung this disabled person for a substantial slice of income while the MP concerned just passed copies of letters between agencies without doing anything active.

HMRC clearly needs major root and branch reform to make it fit for purpose to a modern economy. Even in the digital age it needs to be re-localized, transparent and customer responsive. It needs to focus on the ‘Panamas’ of this world rather than going after people who are trying to develop something for themselves and their communities, sometimes as an alternative to claiming benefits.

Simon Carter
Simon Carter
8 years ago

Interesting. What you are really talking about is an FSB, (Federation of Small Businesses) but from a different mind set. Very often self employment is simply about earning ones own living & hopefully creating a lifestyle, but we are obsessed with the very much misplaced assumption that everyone in business must be driven & pre-occupied with building their business,

8 years ago

An interesting article and there does need some unity amongst freelancers. There are associations such as IPSE, which provide support for freelancers in the UK.

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