Educating Downing St. on The Needs of UK Freelancers
Let’s kick off with some facts that I’m sure have been made to the UK Government already:
- There are 2 million freelancers in the UK (1.77m work freelance in their main job, c. ¼m work freelance as a second job)
- Between 2008 and 2016, the number of freelancers in the UK increased by 43%.
- Freelancers contribute £119 billion to the UK economy.
As if it needed highlighting, UK freelancers are an integral community within the UK workforce, yet increasingly feel under-supported by successive Governments.
A week before the Autumn Budget 2017, I was invited to attend a trip to №10 Downing Street by Enterprise Nation. The premise of the event was to meet with Jimmy Mcloughlin, the PM’s Business Policy Advisor to discuss (a) what the Government could do more to help small businesses and (b) what they’ve been doing well so far. (It was suggested that these sessions run better if we focus on the positive. Easier said than done, I can tell you.)
What’s Important to UK Freelancers
A week before my visit, I asked the members of Freelance Heroes what I should focus on during my brief visit, and you can download the complete unedited thread of responses here. I knew I wouldn’t be able to mention it all, so I’d planned to get 3 points across, at least:
- To help move money in the economy, create legislation that gets bigger businesses to pay on time and to agree to fairer payment terms with their smaller counterparts.
For example, in Germany: “the period for payment of a purchase price or payment of work performed may not exceed 60 days. If the contracting entity is a public authority, the period may not even exceed 30 days.”
Not only this, but there are stricter rules around late payment that strongly favour the supplier.
The government should also not agree to work with companies that continuously flout the agreed payment terms they have with their suppliers.
2. Abolish IR35.
IR35 is unquestionably a poorly thought through piece of legislation that was not fit for purpose when first announced in the early 1990’s, is largely unenforceable, and is designed to address a problem that no longer exists.
3. There is support for those who are long term unemployed to start their own business, but what about those who aren’t? Where is their support?
In the party visiting №10 (other than Enterprise Nation themselves) were 19 other business owners, representing the manufacturing industry, exporting, professional services, and more.
I was there representing the many freelancers who don’t all start out on the back of a golden handshake from their previous employer, and are great at what they do — whether designers, consultants, artists, developers, trainers, PA’,s or other.
My Opportunity to Influence Key Decision Makers
When walking through the door to №10 itself, I couldn’t help but think of the many dignitaries, world leaders, and captains of industry that had trodden the same path. Although I’d be there for less than an hour, it was an honour to be invited into this remarkable building.
It’s only when you’re inside that you truly realise the vastness of the place, and just how many people work there. I lost count of the number of offices I could see and walked past. All electronic devices were taken from us when we arrived, and we were then led to the back of the building, past the Cabinet Room and up the stairs adorned with the portraits of previous Prime Ministers. The meeting itself took place around a long table (similar to the Cabinet table, you’d have seen in the media).
The discussion lasted less than an hour, with around 20 mins allowed to for everyone to introduce themselves and a further 30 minutes for people to raise the issues that we were there to discuss. I knew now that not everyone was going to get the chance to be involved in the discussion, but there was no way I was leaving without voicing my points.
The topics that were raised swayed from export tariffs, to skill shortages, parental benefits, bank loans, and IR35. I was in and my points were raised, which also resonated with many in the room. Especially the concerns about late payment.
Needless to have, I had a printed out version of the Freelance Heroes thread with me which I presented to Mr Mcloughlin to read (I emailed it too, just in case he preferred an electronic copy).
In addition to my points above, I did also manage to generate a slight furore when I mentioned not to lower the VAT threshold to the reported £40k that it’s expected to be. Especially amongst those who hadn’t heard the rumours.
When I spoke with Jimmy Mcloughlin on a 121 basis outside, I asked him again to embrace the freelance community and focus a little more on the carrot and a lot less on the stick. Not all freelancers are Deliveroo riders, Uber drivers, etc. In fact, most aren’t and we shouldn’t all be filed under the same heading.
I raised these issues again in my recent tweets to the Chancellor ahead of The Budget:
A message to @PhilipHammondUK ahead of the #AutumnBudget. Not all freelancers are Uber drivers, Deliveroo riders, etc. Most are designers, developers, consultants, accountants, VA’s. trainers. etc, and play a critical part in our economy’s success. 1/5
— Ed Goodman (@edagoodman) November 17, 2017
Please, @PhilipHammondUK, don’t put freelancing and the gig economy in the same box. Encourage freelancers — many could be the bigger businesses of the future with your help. e.g. Use Government’s strength to get bigger businesses to pay more quickly… 2/5 #AutumnBudget
— Ed Goodman (@edagoodman) November 17, 2017
…Avoid lowering VAT to anywhere near the alleged £40k threshold. Ensure every corporate pays their way, then ring fence a % of that to increase the skill gaps for both employed & self-employed. Also, @PhilipHammondUK, set a plan to simplify reporting (i.e. not 1/4ly)… 3/5
— Ed Goodman (@edagoodman) November 17, 2017
…Don’t wait to people to be long term unemployed before offering state support to start a business. How can you help them much sooner? In short, @PhilipHammondUK, focus a little less on the stick and more on the carrot. 4/5 #AutumnBudget
— Ed Goodman (@edagoodman) November 17, 2017
If you need more incentive, there are 2m freelancers in the UK, which represent a potentially large voting pool. Please, @PhilipHammondUK, truly support UK Freelancers this #AutumnBudget. 5/5
— Ed Goodman (@edagoodman) November 17, 2017
Will these words and my visit to №10 change anything? Who knows. However, if it even sparks an interest in Government to learn and do more, then I’ll take that at this stage.
Inconsistencies to Address
There is another issue too. I genuinely do believe that the Government wants to help small businesses. Just some more than others. How does the government even defines a small business?
For example, to be able to claim Research and Development Tax Relief, HMRC defines an SME as a business with not more than 500 employees and an annual turnover not exceeding £100 million.
Yet, the rest of the UK government doesn’t necessarily agree as, for the purposes of collecting statistics, the Department for Business defines SMEs as having less than 250 employees. For the purposes of accounting, Companies House defines a small business as employing less than 50 people and a turnover under £6.5 million.
Just to further complicate matters, other parts of the UK government use the EU definition of a small business which is less than 50 employees & turnover under £10 million. They even define Micro Businesses as having less than 10 employees & turnover under £2 million.
Why do I care about this? As I mentioned from the beginning, freelancing is a vital part of the UK economy and a vital part of growing the economy. One way for the Government to get a handle on how to encourage freelancers (along with other SMEs) may be coming up with an accurate definition of what they are.
Until the Government does more, we need to rely on (and be able to call upon) the true and tested support, knowledge, and experiences of our peers. Another reason why Freelance Heroes exists, which is so the community within it can support each other and thrive as a result. Too often it seems that no-one has our back but us.
