Warning of stampede away from self-employment

New research has warned of a “stampede” away from self-employment because of the impact of the coronavirus crisis on their pay.

An inquiry by independent experts, politicians, union and industry leaders suggested that only third of self-employed and freelance workers wanted to continue with their work status.

Half of 2,500 self-employed workers surveyed said they had lost between 60% and 100% of their household income this year, two out of three were less likely or unsure if they wanted to continue to be self-employed, and three out of four had been unable to access support such as Universal Credit.

Prospect general secretary Mike Clancy, who commissioned the inquiry, said: “The news that barely a third of all self-employed and freelance workers are confident they want to continue to work in this way should be a massive wake-up call to the Government.

“These workers have powered our economy in recent years and this flexible workforce were lauded by ministers as key to our prosperity, but the way they have been treated in this pandemic is disgraceful and will have consequences for our ability to recover in 2021 in beyond.

“In the long term we need fundamental changes in how these workers are treated. For now, the Government has to listen immediately to this inquiry and introduce a scheme to halt the stampede away from self-employment that that their policies are causing.”

Community general secretary Roy Rickhuss said: “Our findings must serve as a catalyst to ensuring that those self-employed workers who have so far missed out on Government support, urgently receive it.

“Over 60% of self-employed workers feel less likely or unsure they want to be self-employed or freelance in the future. This would be nothing short of a disaster for our economy, prospects of an economic recovery and the livelihoods of thousands of working people and their families.”

Martin McTague of the Federation of Small Businesses said: “The self-employed community was fundamental to our recovery from the last recession, but the Government often struggles to understand and appreciate the contribution of this vital part of the economy.

“If we want it to drive a similar bounceback over the months ahead, we need to give sole traders the help and support they desperately need, and encourage more of those who are out of work to strike out on their own.”

The final report will be published in February, but it warns that urgent action is needed to avert a stampede away from self-employment.