Making Ends Meet Is Harder Each Year
In 1995 the average weekly earnings of someone self employed was £300. In 2016, 5 million self employed people average £240 a week. In 2016 they are much more in debt, running costs have increased substantially and they have little alternative now but to remain self employed. Most are happy to remain self employed but are technically in poverty and do not achieve the national living wage. The UK is the 4th easiest place in the world to start a business but one of the hardest and unfairest when it comes to making a reasonable living.
I've never been self employed but when I started my business, that is still trading today, there were half the number of self employed people in the UK and it was much easier to make ends meet in your own business. Running costs and taxation/social costs were much lower against income and there wasn't the price competitiveness - including the 'gig economy'. Although Corporates are, and will continue to be, in melt down regarding job losses they do not lose overall market share or profitability to the self employed.
Government allows large corporations to make increasing amounts through contracted out public services, training, infrastructure and capital subsidies, credit, loans and paying their suppliers in an average of 72 days. Government remain reluctant, particularly until Brexit, to collect more tax from large corporations but want more from the rest of the business population.
Brighter people than me have recommended a trade union
Ten years after setting up my businesss, in 1995, I first noticed that life was getting harder for family, friends and colleagues that were self employed and this article in the Independent made the case for a Trade Union http://www.independent.co.uk/news/business/the-self-employed-need-a-unio...
More recently Doug Richard who was paid to advise the Conservative Party in 3 reports, before and after they were elected, recommended there was a trade union for the self employed and 2 years ago Rohan Silva, the Prime Minister's ex adviser recommended the same. Reluctantly, as I'd always believed we could find private sector solutions, after the success of the legal case brought by the GMB trade union against Uber on behalf of some self employed drivers, I now agree with this recommendation.
It will be a very different trade union than is commonly understood but unlike the many business membership organisations it will not be a lobbying organisation and will be independent of Government and the Financial Sector. It's main purpose will be to organise, negotiate and if necessary, take legal action against those organisations in the public and private sector which prevent self employed people, through no fault of their own, from earning the national living wage - making ends meet.
Self employed people cannot be seen to complain
3 out of 5 self employed people expect to be running the same business in 5 years time and all the surveys show they mostly value their independence and lifestyle even though they work long hours for small rewards. They're happy but poor and always must smile and carry on. Customers and cash flow are the two priorities of all self employed people and as every customer is precious, and increasingly difficult to secure, it is commercial suicide to moan about how tough business is, complain to a customer about unfair treatment, or get politically active to right some wrongs - for example, 31 - 90 days payment terms, auto enrolment, digital taxation and the rest.
So, the self employed need representation but existing mechanisms for this are very weak and often swatted aside by the corporate lobbyists working within Government. It is something I know about. I've spent 20 years working alongside all the small and micro business membership organisations in the UK. There are a lot of them and it's easy for Government to divide and conquer. Very bright civil servants ensure that the consultation with membership bodies and the final reports always end up in the 'direction of travel' that Government policy wants to go.
This usually means codes, regulation, disputes procedures and, especially, creating more financial services/products to stop the self employed being a burden on the welfare state, whilst continuing the record numbers of start ups. This is essential as start ups of single person businesses provide half the new jobs each year and prevent the unemployment rate being a disaster. You can see what I mean about the 'direction of travel' in policy terms by reading this year's, Baroness Mone and Julie Deane OBE reports for Government on the self employed. Next up is Mathew Taylor's (CEO of RSA).
That is not a criticism of highly successful, ultra intelligent, authentic and well meaning individuals but I do know the system. I've been on countless government funded research and consultation committees, set up social enterprises, some nationally Government funded, (e.g. Enterprise Agencies, SFEDI Group and Enterprise Rockers CIC), been on major Government policy consultative bodies (e.g. Council for Excellence in Leadership (Small Firms Group) and Ethnic Minority Business Task Force), campaigning (e.g. #PayIn30Days), petitioning and lobbying through my friends in the small and micro business membership organisations to make life better for micro business owners (0-9 employees). However, without an organised 'power of plenty' to negotiate or take action Government can deflect, defer, inquire and, in some cases, just ignore the representation on behalf of the self employed.
Why a Trade Union as well as the FSB, FPB,IOD, IPSE, Enterprise Nation and others?
A new, modern trade union is completely different, from the current small and micro business membership organisations. These organisations would lose members if they are kicked out of the Government consultative 'tent'. Every year there are new Small Business Task Forces, comprising the membership organisations, which make it easier for Government to consult with them on key issues, such as Brexit, skills, regulations and so forth.
This will continue and when a new Government policy is announced, membership organisations can usually 'welcome' the policy and say 'Government has listened to them'. They see themselves as lobbyists and 'critical friends'. It is always good to have a Government Minister at the annual conference. It is consultation and not negotiation. It is a tad cosy because most small business membership organisations require Government, and their big corporate sponsors, good will and, sometimes, funding.
Business owners, like me and my business partners, in limited companies will probably not join a trade union. High earning freelancers such as IPSE members are unlikely to, as well. But 10 of the biggest business membership organisations won't have together even 8% of the self employed as their members. The first thing a new Trade Union has to do is attract 20% - one million members. If the membership fee was £12 per annum for all those that already in a membership body, including actors, musicians, farmers, journalists and the like that are already in unions, and no more than £24 p.a. for those that aren't then it can be done.
What would a modern Trade Union do for self employed people?
Self employed people need a strong new type of union, backed by at least one million members plus the five million members currently in the TU movement. It's main aim is to negotiate with Government and those large corporations that exploit the self employed status and, if necessary, as in the recent case brought by the GMB union against Uber, take legal action.
In addition a self employed people's union with such buying power can offer a credit union, micro finance and income protection, sickness and other low cost, optional, independent, insurance cover. Other countries have shown how modern self employed trade unions can work well whilst retaining the enterprise and independence of the self employed person. See this 2015 report from the Co-operative movement http://www.uk.coop/sites/default/files/uploads/attachments/not_alone_-_t...
In the interim there is our 3rd global#MicroBizMattersDay on January 13th 2017 where millions of self employed and micro business owners will give time to help each other. It proves collaboration can make a difference to our business lives. http://MicroBizMattersDay.rocks
I'm Tony Robinson OBE, the Micro Business Champion, a business owner, professional speaker and the author of the popular satire 'Freedom from Bosses Forever' (Kindle, paperback and audio book). I'm the founder of the SFEDI Group and co-founder, with Tina Boden, of the Enterprise Rockers CIC which organises and presents the annual, global #MicroBizMattersDay.
2016 was the 30th Anniversary Year of our primary business - The Business Advisory Bureau Limited/Entrepreneurs UK and the 20th Anniversary Year of my founding the UK Government recognised Sector Skills Body for Enterprise and Business Support, the SFEDI Group (includes the Institute of Enterprise and Entrepreneurs), which I still co-own.
I was honoured to receive an OBE in 2001, and two Lifetime Achievement Awards for Enterprise Support - in 2012 from the IAB and 2013 from SYB magazine and have appeared in the Fresh Business Thinking and Smith and Williamson Power 100 of influencers on UK entrepreneurship in 2014 and 2016.