Chancellor’s ‘wanton oversight’ of freelancers risks the recovery

The Chancellor risks doing permanent damage to the economy unless he reconsiders his ‘wanton oversight’ of self-employed workers, a leading trade union for the self-employed has warned.

Prospect, which represents tens of thousands of self-employed and freelance workers, made the warning after report in the Sunday Telegraph that the Chancellor was considering hiking National Insurance Contributions for self-employed workers so they are equal with those for employees, despite the vastly different state support and rights given to employees.

A recent report from the Inquiry into the Future of Self-Employment found that 79% of self-employed workers would oppose the equalisation of NICs and that 88% felt that the level of support they had received in the pandemic was not a fair reflection of their tax contribution.

This follows the Chancellor’s repeated refusal to address the flaws in his Self-Employed Income Support Scheme which have seen up to 3 million self-employed workers excluded from any financial support during the pandemic. As a result, the Inquiry found that half (47%) of self-employed workers were considering leaving self-employment. Prospect warns that pursuing a policy of tax rises on the self-employed would only accelerate the stampede away from self-employment and risk holding back the economic recovery.

Prospect general secretary Mike Clancy said:

“It is hard to think of a more disastrous policy than hammering the self-employed with tax rises just as thousands are considering quitting self-employment due to a lack of government support.”

“First the Chancellor excludes hundreds of thousands of self-employed workers from support, then he ignores them for months, then he raises their taxes just as there is light at the end of the tunnel- it beggars belief.

“Instead of continuing this wanton oversight of the self-employed, the Chancellor should be helping to give them the confidence to restart their businesses and drive forward the recovery.”

More information about the Inquiry into the Future of Self-Employment can be found here: https://prospect.org.uk/get-involved/inquiry-into-the-future-of-self-employment/