§ Mr. Mark Prisk (Hertford and Stortford)I beg to move,
That leave be given to bring in a Bill to make provision about self-employment.The Bill, which particularly creates the right to self-employment, is supported by hon. Members on both sides of the House, including the chairman and both vice-chairmen of the all-party small business group. I take the opportunity to thank the many Members who have offered their support.The self-employed are vital to our economy both nationally and locally. Numbering in excess of 4 million people, they comprise of owner-managers of shops, factories and farms as well as freelances working in the media, information technology and the creative industries. Indeed, it could be said that Members of the House can technically be included among their ranks, so I guess I should declare an interest. Together, those 4 million people are leading creators of this country's wealth. They provide most of the local services that we use and employ approximately half of those working in the private sector.
At the same time, because the nature of work is changing, self-employment is becoming an increasingly popular option. The days of working from nine to five are gone, and the impact of technology means that when and where we work is constantly changing. Self-employment has the flexibility to respond to those changes, which is why it is increasingly the first option for many people at work.
A good example of that is the recent huge rise in the number of self-employed women, who have set up their own businesses and in the process smashed the glass ceiling. That is a wonderful market example of challenging discrimination. However, self-employed people matter not merely for their economic work. For me, the self-employed embody a value, which is one of the reasons why I came into the House in the first place: it is the simple idea that, no matter who one is and what one's background, if one has the ability, the ambition and the will to work, one can be one's own boss and make one's way in the world.
Sadly, in this country we do not seem to realise that full potential. Despite the excellent work of organisations such as the Federation of Small Businesses, the self-employed continue to be discriminated against, whether it is by high street banks unfairly refusing mortgages or by the state handing out inferior benefits. The root of that negative attitude lies in the very status of self-employment. The onus lies with an individual wishing to become self-employed to prove his status. That is not, as it may seem, a simple process, because the regulations are based not on consistently applied criteria but on ever-changing case law.
Thus many self-employed people have to prove and re-prove their status every year. Indeed, some have to do so for each contract. The House will recognise that that is an unreasonable requirement. After all, why should a fisherman or, for that matter, a freelance writer, have closely to follow the legal ins and outs and the latest verdicts, and then try to determine whether those apply to him or her now or in the future? Accumulatively, 547 that reliance on changing case law represents an appalling waste of time and money. For example, if only half of the 4 million self-employed lose two hours a month in dealing with that problem, that represents more than 3 million working days lost to the economy every year.
In short, the current approach is confusing, wasteful and adversarial. It is also inherently unfair, because it bases the burden of proof not on the state but on the individual. The purpose of my Bill is to reverse that situation by creating a right to become self-employed, removing the confusion of ever-changing rules, and switching the burden of proof from the individual to the state. In practical terms, my Bill would achieve that by requiring individuals to register as self-employed, with Government agencies then being entitled to challenge that registration for a period of up to, say, six months.
By registering, an individual would make an informed and positive choice, and registration itself would remove the need to continue to rely on ever-changing case law, with all the uncertainty and waste that that creates. Equally, by registering, an individual would recognise both the freedom and the responsibility that self-employment brings. Rights must balance benefits with burdens.
Let me offer two examples, one of a burden and one of a benefit. First, when an individual registers, he or she will be required to have insurance cover appropriate to the nature of their work. That would be particularly relevant to those working in a hazardous environment, such as road haulage or agriculture. Conversely, registration could allow people to opt out of paying class 4 national insurance contributions, especially given that state benefits are fully paid for by class 2 contributions.
That right to self-employment would be enormously beneficial. It would give people a real freedom of choice while emphasising their responsibilities; it would bring relative certainty for most small enterprises—an essential ingredient for good business; it would save millions of productive working days, and thereby millions of pounds in lost revenue for the Government; and it would 548 significantly reduce the need for the Government constantly to redefine self-employment in order to regulate and tax that activity. There could be wider benefits from registration in the workplace, which Ministers may wish to consider, such as trying to define a worker and an employee.
The self-employed lie at the heart of our economic life. They are the source of most private sector jobs; they provide the services upon which most of us rely; and they represent a vital source of innovation. Equally, social and economic changes are likely to increase the demand for self-employment. As a recent survey by the Prince's Trust has shown, record numbers of school leavers now want to be their own boss when they enter work. They know that in a highly competitive, global economy, in which footloose multinationals regularly downsize—as the term has it—it is perhaps self-employment that will give them some measure of control over their working lives. For many of them, as the next generation of workers, it is the way ahead. That is why it is now time to update how the state interacts with the self-employed.
We need to move away from a confusing, unfair and adversarial approach and towards giving people the right to choose how they work and the freedom and responsibility of that choice. The purpose of the Bill is to provide that right. It would not solve all of the problems in the relationship between Government and the self-employed. However, it represents a vital first step in overhauling how we treat the self-employed and I therefore commend it to the House.
Question put and agreed to.
Bill ordered to be brought in by Mr. Mark Prisk, Mr. Richard Bacon, Mr. John Baron, Mr. Peter Duncan, Brian Cotter, Mr. Mark Francois, Michael Fabricant, Mr. Adrian Hook, Angela Watkinson, Mr. Kerry Pollard, Mr. George Osborne and Mr. Alistair Burt.