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Championing ‘good work’ is not just a way to provide workers with better rights, it’s key for improving productivity too. Back in 2017, when we published the Taylor Review, we were interested in understanding whether and how legislation could adapt to the rise of new ways of working – self-employment, the ‘gig-economy’ and zero-hour contracts – to ensure ‘good-work’ up and down the country. Recent research published by Centre for Cities is a good reminder of the pressing questions the Taylor Review raised, especially in relation to skills and place.
The rise in self-employment in recent years has mostly concentrated in cities, which now account for 52 per cent of all self-employment in the country, compared to 48 per cent in 2008. Since 2008, self-employment grew by 36 per cent at the national level, but by 44 per cent in cities. As a result, five million individuals in the UK – around one in seven of those in work – are now self-employed and just over half of them live in cities.
But if the rise in self-employment has mostly been urban, the nature and quality of self-employment vary greatly between cities. It is in cities with stronger economies, places like Oxford and Cambridge, where self-employed people are more likely to be in higher-skilled roles, such as consultants and freelancers, and are more likely to supplement their self-employment income with other forms of employment too. In contrast, in places like Burnley and Barnsley, over three-quarters of self-employed people rely on self-employment as their only source of income and they mostly work in lower-skilled roles, such as cleaners, hairdressers and drivers.
These differences raise a number of questions about the role of self-employment in different parts of the country. Is self-employment increasingly becoming a platform for relatively better-off individuals in the South East of England to turn a side ‘hobby’ into a job while being the only option available to earn a living in cities with much weaker labour markets? The costs and benefits of self-employment do not appear to be evenly spread across the parts of the country.
As we stressed in the Taylor Review, self-employed people are less likely to access training, and the concern here is that, if nothing changes, self-employed people, in particular those in parts of the country with weaker economies, will be less able to develop the skills they need to adapt to the changing labour market.
Employment and skills support must reflect the changing ways in which people work. Allowing self-employed people to deduct the costs of any forms of training from their income taxes – not just those related to their roles – might be a possible way to help them prepare for the future of work. Businesses have a responsibility too – in industries with high-levels of self-employment, they should join forces and contribute to the training costs of self-employed individuals. And other solutions we proposed in the Taylor Review including increased flexibility for the use of the apprenticeships levy and better join-up service support in terms of employment and wellbeing at the city-region level are important too.
Technology has given us the opportunity to experiment with new ways of working and a more flexible labour market. We must safeguard such benefits and at the same time find ways to ensure that every individual in every part of the country can have access to ‘good work’.
Matthew Taylor is interim Director of Labour Market Enforcement. He previously led the the Taylor review of modern working practices.
Matthew has been Chief Executive of the RSA (Royal Society for the encouragement of Arts, Manufactures and Commerce) since 2006.
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