From the lobby: A tweak is a long time in politics

From the lobby: A tweak is a long time in politics

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Do you remember when Brexit wasn’t even a word, when politics were boring and when Europe was only in our minds when we started to think about holidays? Today we stroll down the corridors of power, find out who’s in and who’s out. Wander into Strangers Bar for a swift half pint and listen in to plots and counter plots. We fly the flag for the UKs growing band of self-employed, contractors and freelancers and we make sure their voices are heard loud and clear in the seats of power.

New year, same blunders. For Theresa May, January was the month of the reshuffle that wasn’t: or rather, the reshuffle that was supposed to show her strength and control but did little reassert her authority over her party.

The press build-up advertised the reshuffle as a new beginning for a new year. A refreshed Prime Minister would finally be exerting control over her cabinet: the woman who at the start of last year was touted as the ‘only adult in the room’ would finally be in control of the nursery again.

The reality was a little different. Things got off to an inauspicious start when the Conservative Party’s blunder-prone Twitter account accidentally announced that transport secretary Chris Grayling would become the new party chairman. The hapless Grayling was in post a total of 27 seconds...

If anything, it only got worse from there. Education secretary Justine Greening dramatically quit the government, Jeremy Hunt refused to budge from the Department of Health, and the day ended with many saying that the most the teetering Prime Minister could manage wasadding the word ‘housing’ to Sajid Javid’s title.

But if the reshuffle did little for the government and less for Theresa May, it still had some significant implications for the self-employed. Because, although the main cabinet reshuffle was a damp squib, there were some much more significant changes in the junior minister reshuffle.

Among the biggest was the small business minister Margot James’s move to the Department for Digital, Culture, Media and Sport. The result? A new small business minister for the self-employed: Andrew Griffiths. The MP for Burton may have something of a task on his hands rebuilding the self-employed community’s confidence and trust in the government.

UPPAL AND AT ‘EM
It’s all change for the self-employed at the moment: not only is there a new small business minister; the new office of the small business commissioner is also getting off the ground. It’s a post IPSE had been calling for a long time, based on the Australian model, which essentially gave small businesses and the self-employed a government champion.

The UK government adopted the policy in 2015, but it was only in October 2016 that it finally appointed entrepreneur and former MP for Wolverhampton South West Paul Uppal to the post. Now, as of December, Uppal’s office has a new complaint handling service, as well as a website with guidance and advice on self-employed rights and how to deal with poor payment practices.

Now the wheels are turning and the office of the small business commissioner is shifting into gear, it’s up to Uppal to be the champion the self-employed need. For too long, clients’ poor payment practices have been wreaking havoc on the self-employed, with late payment and even failure to pay at all often going unpunished. Now, hopefully, things should start to change.

NOT-SO UNIVERSAL CREDIT
If the government is starting to tackle client late payment, it has perhaps been a little more sluggish solving its own late payment problem: with Universal Credit. Since this universally backfiring new benefits system was first introduced by Iain Duncan Smith in 2013, it has caused nothing but problems – particularly for the self-employed.

The idea behind it was to roll six different means-tested benefits into one monthly payment. Surprisingly enough, however, combining Jobseeker’s Allowance, Housing Benefit, Working Tax Credit, Child Tax Credit, Income Support and income-based Employment and Support Allowance – as well as all the means-testing that goes with them – turned out to be just a little bit of an administrative burden.

The result? Hard-up benefits claimants across the UK found themselves waiting no less than six weeks for their first much-needed payments.

Although chancellor Philip Hammond announced in the Autumn Budget that the waiting time would be slashed from six to five weeks, this is still far too long for vulnerable self-employed people – and indeed for any struggling benefits claimants.

This not-so universal credit system has also been particularly hard for self-employed people because of its burdensome monthly Minimum Income Floor. The Universal Credit payments people receive are based on their income each month, but because this fluctuates for self-employed people, it has to be an estimate – their ‘Minimum Income Floor’.

This creates two problems: firstly, it forces a major administrative burden on the self-employed, who have to tally and submit their income every single month. It’s also often inaccurate: in fact, research last year found that self-employed people receive up to £3,000 less per year than employees on the same income.

The government is at last, however, starting to take note of the problems, and has been conducting an inquiry into the rollout of Universal Credit.

In the January hearings, IPSE highlighted some of the challenges for the self-employed and called for an annual – instead of monthly – Minimum Income Floor to make the system fairer.

PENSION PANDEMONIUM
For a long time now, self-employed pensions have been the UK economy’s hidden ticking time bomb. Right now, just 16 per cent of self-employed people are paying into a pension, and research suggests over a third of freelancers feel they are simply not in a financial position to start saving for later life. 

As with Universal Credit, it’s taken the government a while to get its gear in motion on this one. But after it was highlighted in the Taylor Review last year, the wheels of government are finally turning.

It has pledged to explore options for improving pension uptake among the self-employed, and in a report into pension auto-enrolment at the end of last year, the Department for Work and Pensions (DWP) even said it was “looking forward to research in the field from HMRC and the Association of Independent Professionals and the Self-Employed.”

2018 may have got off to a rocky start for the Prime Minister, but from Universal Credit to tackling late payments, things are looking up for the self-employed.

Lobby