As the UK settles into life under a Labour government, what can contractors expect to see this year? IPSE offers some suggestions…
As January unfolds and 2025 gets underway, the self-employed could be forgiven for feeling uncertain about what to expect from the year ahead.
While 2024 saw Labour swept into 10 Downing Street, it may seem so far that little has changed.
That is the view of IPSE’s Policy Director, Andy Chamberlain. In an article published on the association’s website, Chamberlain labelled 2024 “another flat year” for the self-employed sector – one which saw “precious little progress on the issues that really matter”.
And although “2024 was supposed to be the year the UK turned a corner, both economically and politically”, it didn’t quite deliver.
However, Chamberlain argues that 2025 could be more positive for the sector as a whole. In his article, IPSE’s Policy Director identified some key issues.
A stable political ship?
With no general election due until 2029 and a “healthy majority” under its belt, IPSE believes the political situation is “likely to be fairly stable this year”.
That means the Labour government is “free to push forward with its agenda”. That’s the case for 2025 – though it may not hold true for the duration of this parliament. Chamberlain concedes that “the polls suggest Starmer is staggeringly unpopular”. This could affect the results of local elections taking place in May, “which have the potential to embarrass the government”.
So, spring could hold some surprises, but until then, the government can focus on delivering against its key manifesto pledges.
Minority parties could steal votes
Some of those election surprises could come from Reform UK. While Chamberlain notes that the party is divisive, Reform UK “included a pledge to scrap IR35” in its manifesto at last year’s election.
Whether the self-employed “like them or loathe them”, Reform UK is positioning itself as “the primary ‘right-of-centre’ party” – and, if the party continues winning confidence from voters, they could “establish themselves as a genuine force in UK politics”.
Liberal Democrats “at least listening to our sector”
Having “consistently voiced support for the self-employed”, the Liberal Democrats could perhaps be a more palatable alternative than Reform UK to some voters.
Particularly because they previously pledged to “end the Loan Charge and review IR35” – something, Chamberlain believes, that demonstrates the party is “at least listening to our sector”.
If the party is “persuaded to adopt pro-self-employment policies”, they could yet “establish themselves as the party of self-employment”. The Liberal Democrats represent “a sizable block” in Parliament, with enough seats to “make a difference on key issues”.
Scope for optimism on economic growth
Beyond the corridors of Westminster, Chamberlain hopes “we might see a return to growth for the self-employed sector”, despite some stagnation in 2024.
And if the number of self-employed increases to anywhere near – or beyond – its pre-pandemic peak, IPSE’s Policy Director believes the UK will have found the solution to economic growth – because “it’s all a bit ‘chicken-and-egg’”.
“The self-employed are the worker bees that drive the economy forward, allowing larger businesses to de-risk hiring, be more innovative and cope with peaks and troughs in demand”, Chamberlain said.
“A thriving economy would no doubt create space for more self-employment to flourish; a flourishing self-employed sector would certainly spur the economy on”.
If the government can “harness the latent entrepreneurial talent” in the UK, ideally through an appropriate policy approach, “we should see the economy growing”.
And, Chamberlain concluded: “if that happens, 2025 will be a good year”.
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