DWP Select Committee Launches New Inquiry into Self-Employment And The Gig Economy

The Gig Economy

The Commons Work and Pensions Committee is launching a new inquiry into whether the UK welfare system adequately supports the growing numbers of self-employed and gig economy workers, and how it might be adapted to suit their needs. This will be a wide-ranging inquiry, looking at areas including Universal Credit and other working-age benefits, pensions, and labour market participation. The “gig economy” has come to prominence recently with high profile issues over the hours, pay and conditions of workers in large online courier and cab services like Hermes, Deliveroo, Amazon and Uber.

Background

• Nearly 5 million people, 15% of the workforce, are now self-employed.
• The proportion of people who are self-employed has been growing since the early 2000s and has accelerated in recent years. The ONS believes that substantial levels of self-employment are now a structural feature of the UK’s labour market:

Source: ONS, Labour Force Survey

• Although most self-employed people work full-time, it is part-time self-employment that has been growing faster in recent years. Part-time self-employment grew by 88% between 2001 and 2015, compared to 25% for full-time.
• A recent research report further suggested that the true number of people working part-time in the “gig economy” is much higher than the official employment statistics capture.
• Self-employment suits many people and could be an important lever in achieving policy objectives, such as increased disabled employment rates. Similarly, informal contract work can offer welcome flexibility and, in many cases, supplementary income.
• However, low pay in self-employment is much higher than in conventional work, self-employed workers can experience considerable variations in pay from month-to-month, and the increase in numbers of self-employed workers has been mirrored by a decline in the numbers contributing to pensions.

Call for written evidence

The Committee invites evidence addressing one or more of the following areas:

Universal Credit

• The relative treatment of employees and self-employed people in UC, including:
• How UC adapts to variable incomes.
• The effects of Minimum Income Floors and UC earnings disregards.
• How the introduction of the National Living Wage will affect self-employed UC claimants.
• How variable incomes affect other benefits, such as housing benefit and tax credits.

Jobcentre Plus and support for newly self-employed people:

• What support should JCP offer to people who are self-employed or want to become so and is JCP equipped to offer it?
• How can the DWP best support self-employed people, including those who are disadvantaged, to grow their businesses? What role does the UC in-work service have to play?

Labour market participation:

• How can self-employment contribute to achieving full employment — especially for disabled people, older people and those with caring responsibilities?
• What role does the New Enterprise Allowance play in that and how, if at all, could it be improved?

Pensions:

• How can self-employed people best be encouraged and supported to save for retirement?
• Should self-employed people be required to enrol in a pension?

The deadline for written submissions is Monday 16 January 2017

Rt Hon Frank Field MP, Chair of the Committee, said: “The welfare state was created in an era when relatively secure long-term full-time employment and traditional families dominated. Even Universal Credit will be at least 12 years old when it finally finishes rolling out. The labour market is changing very quickly:  self-employment, uncertain hours, insecure short-term contracts and gig work are becoming ever more prevalent. We will be investigating the extent to which the welfare system can adapt to these challenges and what may need to change.”

Image courtesy of the Daily Mirror: The Rt Hon Frank Field MP