Derek Cribb is CEO of IPSE (the Association of Independent Professionals and the Self-Employed).
Both the Conservative and Labour parties are claiming to be the ‘party of business’. But you can’t be the party of business without being the party of self-employment; with a headcount of 4.3 million, one-person businesses account for three in every four of the UK’s 5.6 million businesses.
More importantly for a Conservative party lagging in the polls, they represent millions of votes. But securing those votes will now be harder for the Conservatives than it’s been in living memory.
My experience of the self-employed is that they are natural Conservative voters. They are deeply invested in their businesses, both financially and emotionally. They favour governments that champion free enterprise, entrepreneurialism, and autonomy. These values are at the heart of what it means to be self-employed, and very many of them saw the Conservative Party as the one that had their back.
But on 4 July, millions of self-employed voters will approach the ballot box feeling worse off – and abandoned by their natural political ally.
A global pandemic, an energy crisis, and geopolitical turmoil have created exceptionally difficult conditions for business and government to navigate. Nonetheless, deliberate choices by Conservative governments – from excluding vast numbers of the self-employed from financial support during lockdown, to rolling out damaging IR35 tax reforms – have uniquely exacerbated the pain felt by freelancers.
Now, they’re being pushed into the arms of rival parties, including one that’s enjoying renewed impetus with Nigel Farage at the helm.
For those most impacted by it, IR35 is the issue that matters. Introduced under Labour by Gordon Brown, then chancellor, the Conservatives went on to throw their weight behind a two-part reform to the rules in 2017 and 2021. The changes made hirers responsible for deciding the tax status of the freelancers they work with.
As public sector organisations have already learned – including DWP – who settled an £87.9m IR35 liability in 2021 (albeit without challenge) – the rules create a huge risk for clients when hiring freelancers.
The inevitable result of rolling these rules out to the private sector was a blanket approach by industry, turning tens of thousands of freelancers into ‘deemed employees’ overnight. It sparked an exodus of highly-skilled freelancers from the market and continues to keep one in ten contractors out of work today.
In short, IR35 is a work-killer and a disaster for business, undermining labour flexibility at a time when UK plc is crying out for exactly the opposite. It’s the issue our members speak to us about most – and they’ve noticed that Farage’s Reform UK has pledged scrap the rules altogether.
It’s no exaggeration to suggest that Reform will win votes on this pledge alone. This should worry the Conservatives, whose South Eastern heartlands are home to approximately 430,000 freelancers. And if the threat of Reform wasn’t enough, the Liberal Democrats have also offered to review the IR35 reforms to ensure fairer treatment for the self-employed.
Another problem for Rishi Sunak is that he, as chancellor, pushed the reforms through Parliament, despite intense lobbying efforts by business groups (including IPSE) and some of his own MPs. Thousands of freelancers experiencing negotiation breakdowns with clients, or reluctantly accepting employment with an umbrella company, see the Prime Minister as the one responsible.
He has only one way of getting them back on side: scrap the IR35 reforms.
Making such a promise would help Sunak see off the threat posed by the Lib Dems and Reform, each of which is making a direct and calculated appeal to a highly-engaged – and normally Tory-leaning – freelancer electorate.
Undoing the damage caused by IR35 would mark a turning point in the relationship between the Conservatives and the self-employed. By fully embracing supportive, pro-freelance policies at this election, the Tories might just have a shot at restoring this natural, but fraying, political alliance.
The post Derek Cribb: Sunak has one chance to repair the Conservatives’ natural alliance with freelance workers – scrapping IR35 appeared first on Conservative Home.
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Author: Derek Cribb
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