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Tue, 14 July 2020

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The Conservatives must keep their promise to review IR35 and support the self-employed

The Conservatives must keep their promise to review IR35 and support the self-employed

IPSE

4 min read Member content

Now Boris Johnson has the largest Conservative majority since 1987 he must not forget the self-employed vote was a significant part of the Conservative Party’s remarkable victory, writes the Association of Independent Professionals and the Self-Employed. 


 

There was a lot of talk about target demographics in the 2019 election, from the “Red Wall” to the much sought-after “Workington Man”. One of the key demographics for all parties – perhaps a little less spoken about, but extremely important – was the self-employed.

It’s just the fact that there are almost 5 million self-employed in the UK that made them important – or that they contribute £305bn to the economy every year. Research by IPSE (the Association of Independent Professionals and the Self-Employed) also showed the votes of freelancers were concentrated in many key marginal battlegrounds.

Overall, there were 186 seats where the number of freelancers was higher than the majority of the sitting MP. Among them were not only 80 Conservative seats, but also many of the party’s target seats, including “Red Wall” constituencies such as Workington, Wrexham and Bishop Auckland. The self-employed vote was, in fact, a significant part of the Conservative Party’s remarkable majority.

Now, Prime Minister Boris Johnson has promised he will do more to keep his new northern, working-class constituencies happy: he must do the same for freelancers and make sure his party keeps its promises to them.  

Because the self-employed were such an important demographic in the election, the subjects that matter most to them were brought to the fore. Throughout the campaign, all the parties jostled to find policies to draw the self-employed vote – many of them from IPSE’s #5millionvotes manifesto.

The Conservatives came out strong on this, pledging a full review “to explore how we can better support the self-employed”, including “improving their access to finance”, “making the tax system easier to navigate” and “better broadband”.

The big question: IR35

If there is one issue that dominated the self-employed narrative during the election – and matters more than anything else to freelancers – it’s IR35.

IR35 is a hugely complex piece of tax legislation that causes many self-employed people to be wrongly taxed like employees – without the rights. In 2017, government changes to it in the public sector led to more contractors being caught out. There were mass walkouts, delays across the sector and even the cancellation of major projects.

In April, the same changes will be introduced in the much larger private sector. Banks and other major businesses are worried about dealing with the nightmarishly complex legislation and several have now panic-scrapped their entire contractor workforce.

Because of IPSE's campaigning, by the end of the election all the main parties recognised the threat IR35 posed to freelancers and pledged to review it. This was not in the Conservatives’ manifesto, but in an interview on BBC Radio 4, Chancellor Sajid Javid confirmed that the party would definitely review the changes to IR35. It was a move welcomed by freelancers across the country – and which helped secure their backing for the Conservatives. 

Now Boris Johnson has led the Conservative Party to its greatest victory since 1987, but he must not forget the groups that got him there, from the voters of the “Red Wall” to the self-employed. His government must fulfil its pledges to freelancers – including a review into how to better support them and, above all, protecting the sector from the disastrous changes to IR35. The government must conduct a comprehensive, independent review of the changes, as well as of the impact they had in the public sector. Most urgently, with private sector companies already laying off their contractors, the government must urgently halt the April 2020 roll-out while a review is carried out.

The self-employed sector is among the most productive and innovative parts of the workforce – one of the great dynamos of the British economy. Mr Johnson now has a golden opportunity to supercharge it and drive the economy ahead. But to do that, he must first make sure his party keeps its promises and protects freelancers from a disastrous mistake in April.

 

To read more about IPSE's work, click HERE. 

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