Liz Truss MP: Britain leads the world in self-employment, that gives us a competitive advantage
Addressing the IPSE and Demos’ joint conference entitled "Modern Working: The age of the self-employed", Chief Secretary to the Treasury Liz Truss celebrated the vital role the self-employed play in today’s economy.
Speaking at IPSE and Demos’s joint policy conference in Westminster, the Chief Secretary to the Treasury, Liz Truss MP stated that “Britain leads the world in self-employment and starting up businesses" going on to say "I think that gives us a competitive advantage.”
IPSE and Demos’ joint conference entitled “Modern Working: The age of the self-employed” highlighted the crucial role played by the 4.8 million self-employed workers in the UK and the launch of the report “Free Radicals” authored by Alan Lockey, Head of Modern Economy at Demos, urgently calling for a ‘new deal’ to better support the self-employed.
The vital role that the self-employed play in the workforce was underpinned by Truss, who detailed that “one of the reasons we successfully turned the country around after the crash of the late 2000s is the rise in self-employment and the rise of start-up companies.”
According to the Chief Secretary, the growth of those in self-employment was down to two main factors; technology and culture change.
Ms Truss said that while technology “has massively reduced the barriers of entry to starting a new business”, there was a culture change happening in society, where “people want to take more control of their own careers” and quoting the title of IPSE and Demos released report, she stated that “in my wildest moments, I dream of being a free radical too.”
She focused on particular groups in society which are benefiting from the growth in the self-employed sector, for example millennials, a group that she stated “desire to shape their own future.”
She also discussed those more vulnerable in society, stating that “it is often people marginalised by the mainstream economy that are able to set up their own business and become self-employed.”
Although there were many positives to take away from this growth, she also laid out the challenges that the future workforce, particularly those in self-employment, will face. These include a 60-year working life.
She laid out three fundamental principles to address the challenges facing the sector.
Firstly, she proposed giving individuals more control over their own future. For example giving people more control of their own data, whether they are self-employed or working in the gig economy so people can understand their own finances and their own prospects. Secondly, making sure that "any policy decisions don’t assume the existence of a paternalistic employer." This would include policies on training and pensions. She stated that she “would like to see us go in the direction of individual ownership of those pensions”. Thirdly, helping support more people to get into a position where they are able to go it alone and start their own business.
She said we were now living in a world where “insurgents are much better able to challenge incumbents in a way they weren't before” and that we are seeing “power to the people, not just away from big corporates but also big government and that has to be a good thing.”
Supporting the self employed
In a lively panel session, “Free Radicals: Why self-employment has risen in Britain and how we should support it”, Cathy Newman from Channel 4 adjudicated a panel composed of Debbie Abrahams MP, Nita Clarke OBE, Director IPA, Alan Lockey, Demos, Nigel Meager, Director of the Institute of Employment Studies, Kwasi Kwarteng MP and Ed Mills, Head of Employment at Travers Smith.
Kwasi Kwarteng MP opened the panel, stating that “self-employment will continue and grow in this economy.”
Debbie Abrahams MP spoke of the “great heterogeneity of the self-employed” in terms of sectors, work and security and that “we need policy solutions that reflect the heterogeneity of the sector.”
The heterogeneity of the sector was picked up by Nita Clarke. She stated that there was a need to “unpick” the debate around the self-employed and said that “we have a productivity issue in this country – this is down to a lack of engagement from the workforce. If we can use this report on the self-employed to crack some of this open will be significant, not just for the self-employed but for the whole economy.”
Nigel Meager stated that for the self-employed “their accumulation of finance capital and human capital, skills professional development if they are moving in and out of work and what does it mean for their wellbeing and security” raised policy questions.
He continued, “the government need to look at sickness benefit system to make sure that there is an equivalent safety net for the self-employment” and stated that “income distribution of the self-employed is much more polarised than the income distribution of employees.”
Kwasi Kwarteng MP responded and said: “there are things perhaps we can look in to, this is a relatively new phenomenon I think that broadly yes we should look at some form of protection but we need to be very specific about what we are doing.”
On the thorny issue of pensions, Nita Clarke said: “the government should take seriously the barriers which make life difficult for the self-employed or maybe even discourage them.”
Kwasi Kwarteng MP said that pension auto enrolment is “a good vision or aspiration but the technicalities of it, in terms of the rollout, UC [Universal Credit] hasn’t been the smoothest rollout we could imagine.”
Nita Clarke stated that “if you want to encourage self-employment, then having the floor which protects people and enables them to benefit from public policy.”
Debbie Abrahams MP responded, saying “we must address issues around the minimum income floor.”
Following this session, Philip Collins from The Times chaired a discussion on Brexit between former Cabinet ministers Iain Duncan Smith MP and Sir Vince Cable MP.
When asked about the opportunities post-Brexit, Iain Duncan Smith said "this offers a massive opportunity to change the way that and the terms of business that we are in at the moment’. Raising a key theme of the discussions at the conference around productivity. He said that productivity was linked to the ‘rut that we are in with European trade.”
Liberal Democrat leader Sir Vince Cable responded and said “I struggle to see the opportunities of Brexit”, he said that the hard left “see Brexit as an opportunity” as "they believe Brexit will cause an major economic shock, it will then potential open the way to the extreme politics that they promote.”
You can read more about IPSE’s report, “Free Radicals” here.