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Labour “could make or break the fortunes of the self-employed”

Association calls on new PM to “drag our labour laws into the 21st century” and commits to “working with the new government to get this legislation right”

IPSE has congratulated the Labour government on its landslide general election win, and called on the new Prime Minister, Sir Keir Starmer, to ‘overhaul workers rights by updating rules on self-employment’.

Issuing his take on the party forming the new government, IPSE’s policy director, Andy Chamberlain, said it had “recognised the urgent need to drag our labour laws into the 21st century”.

The importance of this issue to the self-employed was central to the Labour Party’s success, Chamberlain suggested.

Similarly, it is an urgent mission for the trade body; Chamberlain is “eager” for the process to begin during the first three months of government.


Where do this Labour government’s priorities lie?

In the weeks before the election, IPSE had labelled the Labour Party’s manifesto “underwhelming” and “lacking in detail when it comes to the self-employed”. While the manifesto offered little clarity, however, it did reference a document released earlier in the year.

That publication – titled Labour’s Plan to Make Work Pay: Delivering A New Deal for Working People – highlighted key areas of focus for Starmer’s government.

These include the plans to consult on the introduction of a single ‘worker’ status. IPSE believes this could have a “potentially major” impact on the self-employed sector.

The move “has the potential to fix our current outdated system for determining employment status”, and could ensure a “greater alignment of tax and employment status”. Such an outcome would be “widely” welcomed, said IPSE – “particularly if it improves the application of IR35 case law”.

While the association’s analysis of these plans is positive, however, it has also identified weaker areas in the new government’s policies.

These include the commitment to capping Corporation Tax at its current rate (25%) until the end of parliament, which may leave smaller businesses exposed to higher marginal rates due to the “current tapered levels” of the tax.

Another issue of concern to IPSE is the “rather weak” commitment to protecting small businesses from late payments. While the pledge “sounds perfectly reasonable”, IPSE wants the government to go further, by making the Prompt Payment Code “mandatory”.

This would “make any terms exceeding 60 days.. null and void”, and should be backed by legislation that would enshrine 30-day payment terms in law, the body said.

PM “could make or break” self-employed sector

Responding to the Labour Party’s success at the general election, Chamberlain welcomed the new government and highlighted the challenges the Prime Minister faces.

“Congratulations to Sir Kier Starmer. His campaign recognised the urgent need to drag our labour laws into the 21st century”, Chamberlain said.

“This work doesn’t just matter to workers and bosses, but also the millions of people who are their own boss – the self-employed.

“Our outdated employment laws mean that whilst bogus self-employment impacts vulnerable workers, other genuinely self-employed people face an uphill struggle to prove that they’re ‘in business’”, he added.

“Like him, we’re eager for this work to start within the first 100 days of his government, and we look forward to working with the new government to help get this legislation right”, Chamberlain said.

“By overhauling our employment rules, the Prime Minister could make or break the fortunes of the self-employed sector”.

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