Making Brexit work for the self-employed - IPSE

Posted On: 
24th April 2018

The only way the UK will achieve a strong economy after Brexit is by maintaining and building on its competitive advantages, the biggest of which is our flexible labour market, says Jordan Marshall, Policy Development Manager, IPSE. 

Brexit is definitely a growing worry for the self-employed, says Jordan Marshall, Policy Development Manager, IPSE.
Credit: 
PA Images

We need to talk about Brexit. Not the interminable Brussels negotiations. Not another petty parliamentary spat. No, this time we need to talk about the effects of this momentous political event on one of the most important sectors of our economy: the self-employed.

As freelance Marketing Consultant Laura Chamberlain puts it in IPSE’s new report ‘A Brexit Deal for the Self-Employed’, “it feels like the voice of the self-employed has been lost in the Brexit discussion. What really matters to me is whether industries stay in the UK and freelancing opportunities still exist”.

It’s an important point. In this time of uncertainty, protecting the flexibility and dynamism of the UK economy is more important than ever before. And there is no more direct way of doing that than making sure that the voice of the UK’s 4.8 million self-employed is heard loud and clear in the Brexit debate.

IPSE launched its report – based on more than 1,000 responses to a nationally representative survey of the UK’s self-employed population – to do just that: bring the voice of the self-employed and what they want from Brexit right to the fore of the policy debate. And surveying the self-employed and their views on Brexit, IPSE came up with some interesting findings… 

Brexit is weighing on the minds of the self-employed

Brexit is definitely a growing worry for the self-employed. IPSE’s Freelancer Confidence Index survey from the end of 2017 showed that 61% of freelancers now see Brexit as the main factor negatively affecting their business performance – overtaking government policy for the first time.

Gary Sharp, a Financial Services Programme Manager from Glasgow, sums up the uneasy mood: “Brexit has created a lot of uncertainty in the banking sector. It’s not clear whether projects will be based in the UK in the coming years”.

Of course, however, the self-employed are a diverse bunch, and not all have the same gloomy outlook. Simon Nicolson, an Aerospace Consultant from Bristol has a far more upbeat take on it, saying: “Brexit seems to have created more interest in my availability for overseas contracts”.

Balancing migration concerns post-Brexit 

If the self-employed are that concerned about Brexit, what do they want from it?

A significant majority (69%) of the self-employed said they want access to the single market to be prioritised in the Brexit negotiations.

Another thing seems certain: self-employed people still want to be able to move and work freely in the EU. Given the public clamour for a crackdown on immigration, however, this might be a difficult circle to square.

On one view, much public hostility to immigration is down to comparatively unskilled migration to the UK. An option for the government could be prioritising the free movement of skilled professionals while still cutting the number of less skilled migrants. 

Of course, to make this work it would have to be a reciprocal arrangement allowing freelancers from the UK to travel and work relatively freely in the EU – and vice versa. This would help UK-based freelancers too, because many freelancer-heavy industries (such as the creative sectors and IT) are bolstered by large numbers of talented Europeans. So, if a much more restrictive immigration system was introduced, it would surely push many of the businesses in these sectors overseas, cutting UK freelancers off from much-needed work.

Taken together with wanting to work freely overseas, it is fair to say that most self-employed people want to see a Brexit that causes minimal disruption – what some would term a “soft Brexit”.

Building a fair and flexible migration system

There have been many different ideas for a freelancer-friendly post-Brexit immigration system – some more sensible than others.

Perhaps the most discussed idea – employer sponsorship – simply wouldn’t work for freelancers and the self-employed. Businesses take on freelancers because of their agility and flexibility. And, because most points-based systems are extremely bureaucratic, forcing freelancers through them every time they got a new contract would destroy any benefit for clients. 

Entrepreneurship visas aren’t suitable for most self-employed people: they typically have very high investment thresholds.

Ironically enough, it is actually towards Europe that we should probably be looking for inspiration. For example, the Dutch Self-Employment Visa system allows freelancers to work in the Netherlands when they are doing something judged to be beneficial for the country.

There’s also the idea of occupational or sector-specific visas. These could be especially useful for areas of the labour market where there is a particular need. Short-term visas could be useful for filling seasonal shortages too – especially in sectors like construction and agriculture.

What we really need, however, is a serious discussion about which reciprocal migration model will best support flexible working after Brexit. Not just for the EU either: we can find better flexible labour migration models for trade deals with countries right across the globe.

Making the UK work for freelancers

Brexit could also be a brilliant opportunity to rethink the UK’s overall approach to self-employment. The fact is that the self-employed will play a central role in taking us through this turbulent period, and the government must recognise this. As Kelly Gilmour-Grassam, a 25-year-old copywriter from Manchester wrote for IPSE’s Brexit report, “Rather than spending all its energy on Brexit, the government should focus on how to help businesses start and flourish at home”.

Absolutely. If we want to remain a leading economic power, we must rethink how the UK treats its 4.8 million self-employed. We need real, effective training and upskilling options for the self-employed. We need serious thought about helping them save for later life. And, above all, we need a fair and modern tax system, not an outdated, punitive one.

The government’s Brexit strategy must start to face reality. The only way the UK will achieve a strong economy after Brexit is by maintaining and building on its competitive advantages, the biggest of which is our flexible labour market. And the only way the government can achieve that is by securing a Brexit deal that works for Britain’s self-employed. 

 

Read IPSE's full report here.