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Self-employment Trends

Volume 624: debated on Monday 27 March 2017

This Government support those who aspire to be their own boss. Self-employment grew by 148,000—3.2%—in the last year to reach a record level of 4.8 million. Self-employment has contributed 30% of the rise in employment since 2010 to the current record levels.

It seems that not a week goes by without another story emerging of the outrageous treatment of the self-employed. This is exploitation. The Deane review of self-employment reported back to the Government over a year ago, and one recommendation it made was that there should be equal treatment for the self-employed, but all we have is yet another review from the Government. When will they actually take some action?

As the hon. Gentleman knows, the Government have commissioned Matthew Taylor to review the rights and protections available to self-employed workers. He asked what we have already done. The self-employed now have access to the new state pension, worth an extra £1,800 a year in retirement. We have doubled the amount of free childcare, which is particularly useful for the self-employed and worth up to £5,000 per child per year. We have also increased the personal allowance, worth £1,000, to the typical basic rate taxpayer.

The Secretary of State is right: we have definitely helped the self-employed. However, it was put to me at my listening campaign this weekend by self-employed people that they actually want the Government out of their business. They do not want to pay higher taxes, and they do not want more benefits; they just want to get on with their business. Is that something the Secretary of State could support?

I do, and the Government, of course, support that more widely. We are looking all the time at regulations that might hinder the growth of entrepreneurship and self-employment. The actions taken by my Department—for instance, the new enterprise allowance—actively encourage people into self-employment. Some 96,000 new businesses have been set up as a result of the NEA.

The Government’s proposed increase to national insurance contributions for self-employed workers in this month’s Budget showed a scandalous detachment from the reality of the majority of self-employed workers’ lives, a failure to understand the boom in self-employment and a lack of the will to address the issues self-employed workers face, including the fact that one in three is concerned about becoming sick or being injured during their work. What discussions did the Secretary of State have with the Chancellor on this before the Budget, and is he concerned about the reliability of the minimum income floor calculation, given the Office for Budget Responsibility’s comment?

I am confident in the minimum income floor calculation. As the hon. Lady would expect, we have discussions all the time with the Treasury on a wide range of matters. My right hon. Friend the Chancellor said in his letter subsequent to the Budget:

“It is very important…that we are compliant not just with the letter, but also the spirit, of the commitments that were made.”

That is why he decided not to proceed with the class 4 NIC measures set out in the Budget. Also—this is important—all the spending measures set out in the Budget, including on social care, technical education and new schools, will be delivered in full.

My right hon. Friend is right to note that 96,000 new businesses have been started by jobseekers, but many jobseekers still do not know what help is provided under the universal credit system and the new enterprise allowance. Will he say what his Department is doing to increase awareness of these measures?

My hon. Friend makes a good point. Obviously, universal credit is still a relatively new benefit, and many of the self-employed may not be fully aware of the many benefits that arise from it for them specifically. Under UC, self-employed claimants will, for the first time, be offered help to increase their earnings. We will be testing the offer of work coach support to self-employed tax credit claimants. Also, there is an assured level of earnings, but new self-employed claimants will be exempt from this for up to 12 months following their application, which people thinking of setting up their own business will find extremely helpful.