Conservative MP Lord Hannan of Kingsclere says the government and taxman should not be frightened of the freelancer revolution, nor should ministers stand in its way
Lord Hannon is among a small yet possibly growing group of Conservative MPs that have suggested that the current government’s approach to the freelance workforce is outdated. Just this week we reported that David Davis MP has called for a cancellation of IR35, as a way to help Conservatives win the next election.
Hanon is a freelance journalist so is perhaps more understanding than most MPs of how tax and labour policies impact the self-employed workforce in the UK. He too sees IR35 as the “bane of every freelancer.”
Freelancing could be the future of the entire workforce
“Looking at freelancers as some subset, we need to start thinking about whether this will be the future of the entire workforce and about how we need to change our fiscal and employment rules—starting with the abolition of IR35, which is the bane of every freelancer. I declare my interest as a freelance journalist,” says Lord Hannon in a Parliamentary Debate this week on Arts and Creative Industries: Freelancers and Self-employed Workers.
We still have a set of labour rules, social security rules and pension rules that are designed for mass workforces, going back to Chamberlain’s Holidays with Pay Act 1938. However, that is not the world that our children are growing up in; it literally belongs to another century.
“I look at my children, who range in ages from five to 21, and I do not think that any of them will ever have a job as we understood that word in the 20th century,” says Lord Hannon. “They are likely to go through life constantly reskilling and freelancing and adapting to a rapidly accelerating technological revolution. We should not be frightened of that.”
“I know that there is a great sense that AI [artificial intelligence] will put everyone out of work, but that same argument has been made about almost every technological advance since the Industrial Revolution—and yet the number of jobs keeps growing. What it will do is fragment the labour market further; we will become more and more specialised as we are freed up from the current jobs we do to find much more niche employment,” he says.
Hannon believes that Government has been very slow to adapt to the consequences of that.
I hope that one thing that will come out of this is that we do not end up with only state employees being outside this benign revolution. It is not a revolution we should fear; it is one that will create more wealth and liberate more talent, and Ministers should not stand in its way.
“We still have a set of labour rules, social security rules and pension rules that are designed for mass workforces, going back to Chamberlain’s Holidays with Pay Act 1938. However, that is not the world that our children are growing up in; it literally belongs to another century.”
Instead of looking at freelancers as some subset, Hannon says he believes society and policymakers need to start thinking about whether this will be “the future of the entire workforce and about how we need to change our fiscal and employment rules—starting with the abolition of IR35, which is the bane of every freelancer. I declare my interest as a freelance journalist.”
“I hope that one thing that will come out of this is that we do not end up with only state employees being outside this benign revolution. It is not a revolution we should fear; it is one that will create more wealth and liberate more talent, and Ministers should not stand in its way.”
Creative freelancers hold a huge pull on the UK economy
In the same Parliamentary session, Lord Parkinson of Whitley Bay, the Parliamentary Under Secretary of State for the Department for Culture, Media and Sport acknowledged the importance of freelancers and their part in the creative industries.
“The creative industries grew one and a half times as quickly as the rest of the economy between 2010 and 2019, generating more than £100 billion in GVA in 2021. Roughly a third of the workforce in the creative industries are freelancers, double the average of the economy overall,” says Lord Parkinson.
Suank could lose the self-employed vote
Dave Chaplin, CEO of IR35 Compliance firm IR35 Shield says it is “heartening” to hear the creative freelance workforce being acknowledged and celebrated in this debate as a “vital group of workers who contribute hugely to our economy and have become the engine of the UK economy and UK plc.”
“However, IR35 and its newer version, Off-payroll, continues to be a thorn in their side and for the firms that hire them,” says Chaplin. “The draconian and flawed off-payroll working rules must be reformed if Rishi Sunak is to have any prospect of winning over a crucial part of the electorate at the next election,” he says.
You just have to look at how mortgage lenders treat freelancers to realise they are treated as second class citizens and that corporate thinking and policies haven’t kept up with the way people are living and working in the real world.
Prior to this IR35 business I was earning serious money most of which I pumped back into the U.K. economy so I in effect invested in the U.K. why is this being demonised ? It’s as if the government doesn’t want us to work at all tax threshold is another limitation as well as having rogue umbrellas and having to pay for accountants as well is a joke they all take such a carnivorous chunk of our salary , slot us into worthless pension schemes it’s as if the accountants and agents are all in it together nearly half of what I earn half of it is taken by these unregulated companies no wonder so many freelancers that can , relocate to Portugal or other digitally friendly nomad countries I don’t blame them. Then the government harp on about investors saving the economy I mean was I not investing ??? and indeed what exactly is there to invest in ? Everything is already sold and in foreign hands Mr Putin might be putting us all out our misery soon no more ctax income tax maybe death is actually a form of tax relief