David Rutley MP: Everyday entrepreneurs, everyday Conservatives: wooing the self-employed
David Rutley is the Member of Parliament for Macclesfield, Damian Green’s PPS, and a member of the Free Enterprise Group. Follow David on Twitter.
The growth in the number of self-employed is, perhaps, one of the major demographic shifts in Britain that is not fully appreciated politically. According to the Office for National Statistics' seasonal Labour Market data, of the latest 24,000 increase in the number of people in employment, 21,000 are self-employed. This rapidly growing constituency now accounts for 4 million people, some 14 per cent of all those in employment. For the Conservative Party, which is rightly backing peole who want to work hard and get on in life, it is a trend that can't go unmissed.
So, who are the self-employed, what motivates them and how can we gain greater support from their ranks?
The majority of the UK’s 4.8 million businesses – some 56 per cent – are sole proprietors with no employees. Here be few dragons! The reality is that most self-employed people are everyday entrepreneurs, street-level small businesses and office-share operators. Our high-flying, multinational entrepreneurs are, of course, to be congratulated and should be rewarded for their success. But we shouldn’t lose sight of the fact that the most prolific source of self-employment is driving a cab, followed by such professions as being a carpenter or other such skilled building tradesperson. At the moment, self-employment is more common for men and for older people. But the dynamics are changing.The number of women in self-employment is rising fast. In Macclesfield, the constituency I represent, the percentage of women in self-employment is the highest in the north-west. And the number of young people across the country who want to run their own business is high. One survey suggests that up to 70 per cent have at least the ambition to set up their own enterprise while the Prince’s Trust has found that up to thirty per cent of young people actively expect to be self-employed. A YouGov poll has found that 43 per cent of young people have already made money from entrepreneurial activity such as selling their own product or working on a freelance basis.
Crucially, we should not take for granted that “self-employed” automatically means “Conservative-voting”. Indeed, among some BME communities that have not traditionally voted Conservative, self-employment is well above the national average. A recent report for the Scottish Government found that around a third of economically active Scots of Pakistani heritage are self-employed. Despite shared values around enterprise and entrepreneurialism, this is a group that has not historically been known for its Conservative leanings. A stronger focus on championing the self-employed will help change perceptions of our party among those groups we need to do better in reaching.
Laudably, the government is already doing much to assist in this task. By introducing a new employment allowance, for example, it will help encourage the self-employed to become employers by slashing the cost of National Insurance. Meanwhile, the New Enterprise Allowance (with Levi Roots as an ambassador) seeks to encourage longer-term unemployment into self-employment. Furthermore, the government is taking deregulation seriously. The three-year moratorium on new regulations for small businesses is also hugely welcome.
But as Lord Young has rightly argued, there are wider issues of culture and communication still to address. Communications with the self employed should more fully emphasize the assistance available, not the demands that can act as a psychological closed door to growing a business. Creating an aspiration nation means ensuring that the road to running your own business is a clearly signposted fast lane, not Labour’s minefield of forms, box ticking and regulations.
There are international lessons too. Our Canadian cousins have been refining messages and policies for the self-employed for several years, passing a hugely symbolic Fairness for the Self-Employed Act in 2009 to provide opt-in insurance benefits, and pursuing schemes to help the unemployed into the dignity of viable self-employment. In the months ahead, no doubt, the new Policy Board will be keen to learn from case studies like these.
The good news for us, as in so many other areas of economic policy, is that Labour doesn’t get it. Like their union paymasters, they bemoan growth in self-employment in the labour market. All too often, they believe that the self-employed are not in “proper” jobs. Yet, as Lord Young has found, the evidence suggests that most of the self-employed are not pushed into it by necessity but pulled by desire. As Conservatives, we need to stand up for the self-employed and their decision to work their own way in a flexible and dynamic market economy.
With the next election less than two years away, now is the time to celebrate and encourage our everyday entrepreneurs and think big about our smallest businesses. Fundamentally, we Conservatives should continue to recognise that the self-employed are a valuable target constituency in a wide and diverse conservative coalition. There is a real opportunity to refine and target our policy platform – and, crucially, our communications – in the self-employed’s direction: by their side, on their side, across communities, across the country.