Contractor maternity pay and infrastructure were the two most prominent topics of discussion over the course of the 2015 political party conference season.
The Labour Party’s decision to shine light on contractors and argue the case for maternity pay for the self-employed was unexpected. With the Government already considering this issue as part of its review into self-employment, it is one area in which a positive outcome looks quite possible for sole trader contractors and those in partnerships.
Conservative Chancellor George Osborne outlined plans to improve infrastructure, which will have been high up on the list of priorities of many contractors. Ironically though, such improvements could prove obsolete for many contractors, should the proposed changes to limit tax relief on travel and subsistence go ahead.
Whether or not each party plans to follow through with their pledges remains to be seen, and experience suggests that they won’t be. This explains the cautious welcome with which many speeches were met by contracting sector representatives of the UK’s flexible knowledge workforce that is becoming increasingly marginalised as a result of Government measures.
Labour: Extend maternity pay rights to the self-employed
In a speech to the party faithful in Brighton in which he acknowledged the risk and uncertainty associated with contracting, Labour leader Jeremy Corbyn also emphasised the failings of the current Government in protecting the contractor workforce.
Treasury-implemented measures, such as the upcoming cuts to tax credits which will disproportionately impact on lower earning self-employed flexible workers, were highlighted as Corbyn attacked the Tories and accused them of pulling the “welfare state” out of reach of contractors.
Labour’s primary solution is to look at ways in which statutory maternity and paternity pay can be applied to the self-employed, whilst other issues are being examined within Labour’s policy review to find out ways in which it can help self-employed business growth.
Labour’s new found enthusiasm for contractors
Corbyn’s pledge indicated that Labour are willing to do more to assist the contractor workforce than in previous times, with the Freelancer and Contractor Service Association suggesting that the announcement will go some way to level the playing field between contractors and employees.
“In the past, Labour has often taken a downbeat view of self-employment so it is refreshing to hear this support for self-employed workers, many of whom choose to work for themselves,” notes CEO Julia Kermode.
These sentiments were echoed by director of policy at the Association of Independent Professionals and the Self-Employed (IPSE) Simon McVicker: “IPSE has been calling for the self-employed to be able to access a form of maternity pay, so it’s great that Labour are backing this. Additional support needs to maintain the self-employed’s inherent flexibility, as this is where they can make the greatest contribution to the UK’s economy.”
Conservatives: Improving infrastructure
Possibly the biggest news for contractors to emerge from all of the Party Conferences came courtesy of Chancellor George Osborne, who announced the formation of the National Infrastructure Commission.
The requirement for better rail and road links has been a focal point amongst the more mobile of contractors for some time, and the announcement looks set to help ensure that many can offer a greater contribution to the economy over the long-term. Investment is also set to be made into better broadband and mobile connections.
The news was particularly warmly welcomed by IPSE, who had called for a Commission in its Manifesto prior to the General Election:
“The newly announced National Infrastructure Commission is the right platform to deliver long-term projects. This independent body must make sure successive Governments are committed to delivering world class infrastructure.”
Infrastructure also means more contracts
It is not only the outcome of the commission that contractors look set to benefit from, but also the process. As Kermode highlights, delivering on such projects will likely require significant input from the contractor workforce, whilst it will also help supplement economic recovery:
“We need to be mindful that these projects are usually heavily reliant on bringing in skills from the contractor workforce, and we hope that Government will recognise their important contribution to success.”
Liberal Democrats: Standing up for small businesses
While the Treasury has seemingly failed to notice the severe impact that proposals outlined in the Summer Budget are set to have upon small businesses and the self-employed, this is an issue that the Lib Dem’s have previously acknowledged.
Prior to the Liberal Democrat Party Conference, many wondered if newly elected leader Tim Farron would use part of his speech to advocate this minority. He has previously stated that he intends to support small businesses and the self-employed, and there have been rumours that he plans to propose a ‘startup allowance’ of around £100 per week to aid the growth of new and small businesses.
This theme was continued throughout his speech, in which he emphasised the need for his party to stand by small businesses and help to break down barriers that stop businesses from fulfilling their ambitions.
With regards to the proposed solutions to these problems, in many ways, the Lib Dem’s message mirrored that of the Conservatives. Improving infrastructure was a noticeable priority highlighted by Farron. As well as urging along investment in rail links, investment in better broadband was highlighted as necessary to maximising the efficiency of small businesses.
Further measures that benefit contractors
There was further good news for contractors as Osborne also announced that the Treasury would be devolving the power to set business rates to local councils. Potentially, this could mean increased competition between councils in efforts to create business growth.
This could result in lower business rates for work hubs and shared workspaces. Consequently, there could be more opportunities for contractors, as well as a more supportive business environment.
Contractors who have been engaging in unsuccessful bids to acquire a mortgage will be pleased to hear that their case will at least be considered by the Government as part of its self-employment review.
Banks have so far been more reluctant to issue mortgages to the self-employed, compared with employees. However, this news indicates a step in the right direction.
Where was there room for improvement?
Despite the positive takeaways for contractors in the form of the National Infrastructure Commission, many contractors will feel disappointed that the Conservative Party conference didn’t tackle other, arguably more pressing issues. Notably, simplifying the tax system and reducing the cost of doing business were two issues that weren’t touched upon.
Contractors may feel similarly aggrieved that the Tories decided not to address the ongoing debate over travel and subsistence tax relief. The proposed restrictions to expenses tax relief may mean infrastructure improvements won’t benefit a substantial amount of contractors who will no longer be able to afford to commute to distant client locations.
Meanwhile, whilst Corbyn’s gesture at the Labour Party Conference was welcomed, but it came amidst a speech that contracting organisations and contractors felt painted the contingent workforce with the same broad brush, portraying them as poor and vulnerable whilst failing to recognise their input into society.
“It’s good to see Labour talking more about supporting the self-employed, but they need to be careful not to cast everyone in this group as vulnerable,” highlights McVicker.
“The UK’s 4.5m self-employed are a huge contributor to the exchequer and most love what they do, accepting the trade-off between of giving up holiday pay and other [employment] entitlements in order to have the flexibility to choose how they work.”
In this regard, Farron was also a culprit. Patronising quotes such as: “Some of the poorest people I know run their own businesses,” do far more to paint a bleak and inaccurate picture of the contractor workforce than they do to recognise the significant input that they have in building the economy.