Joyce McMillan: Self-employed are the new working poor

Budget day is traditionally a good day for sneaking out bad news; or, perhaps, the kind of good news that might in more radical times have had workers rioting in the streets.

Chancellor Philip Hammond poses for pictures as he prepares to unveil his Budget plans
Chancellor Philip Hammond poses for pictures as he prepares to unveil his Budget plans

So it’s perhaps not surprising that Wednesday was the day chosen by the former chancellor, George Osborne, to announce details of his new job with asset management firm Black Rock, for which – in addition to his parliamentary salary – he will be paid £650,000 a year for one day’s work a week. That, for the record, is an hourly rate of more than £1,600, or about 200 times the sum proclaimed by Osborne during his chancellorship as a “living wage”, at least for ordinary mortals.

It’s all par for the course, though, in an economy which now almost seems to pride itself on being one of the most grotesquely unequal in the developed world; Wednesday was also the day chosen by Royal Bank of Scotland to announce that after a year of distinctly mediocre ­performance, including a loss of £7 billion, they are giving their senior executives an annual bonus package worth £16 million at current share values.

Sign up to our Politics newsletter

In 21st century Britain, in other words, we’ve become shockingly accustomed to this kind of absurd and irrational over-reward for the rich, accompanied by an ever-harsher climate of low pay and insecure employment for the rest of us; which perhaps makes it slightly surprising that in seeking to raise National Insurance payments for the self-employed, in Wednesday’s Budget, the current Chancellor, Philip Hammond, seems to have run into much fiercer storm of opposition than he might have anticipated. In the first place, the proposed tax change breaks a categorical manifesto pledge by the Tories that they would not increase either income tax or National Insurance; and in the second place, it will hit the fat incomes of the tiny minority of very wealthy people who are classed as self-employed, including senior barristers.

What really seems to be riling backbench Tory MPs, though, is the sense that both this move, and the Chancellor’s reduction in the limit for people taking tax-free dividends from their own small companies, will hit at the very demographic which has enabled the Tories to claim that while ordinary earnings have largely been flat-lining or falling in real terms since the 2008 crash, employment has nonetheless remained high. 15 per cent of Britain’s workforce is now self-employed, and that figure is rising rapidly; self-employment accounts for almost half of the recovery in employment figures since the crash. And it’s hardly inaccurate to say that for many of those workers, self-employment – or work in the so-called “gig economy” – amounts to little more than a disguised form of unemployment, or severe under-employment. Half of them earn less than £13,200 a year; and they experience levels of absolute job insecurity and income variability, without sick pay, parental leave, or unemployment benefit during lean times, that those in regular employment can barely imagine.

In striking at the self-employed, Mr Hammond therefore gets it in the neck from two directions. He gets it from Tories, for betraying those who have soldiered on bravely, embracing the idea that they are a new generation of entrepreneurs, when in fact they are mainly just workers suffering a drastic cut in their pay and working conditions. And he gets it from Labour, who are at last rightly beginning to grasp that “self-employed”, in many contexts, is now just another term for the working poor.

And if there is one thing of which we can be certain, in this strange post-Brexit world, and this strange one-party Britain, it’s that whether the National Insurance change is implemented or not, no-one is likely to lift a finger, any time soon, to end the shameful redistribution of wealth from ordinary workers to the extremely rich that has been such a striking feature of Britain’s economy over the last generation. Whenever he is questioned about Brexit, Philip Hammond makes increasingly worrying threats about the steps he will take to make the UK a lean, mean competitor, outside the EU; essentially, he seems happy to sacrifice the wellbeing of the great mass of British people – their wages, employment rights and environmental protections – on the altar of making Britain “a great place to do business”. Labour protests, but cannot achieve enough unity to gain any traction on a UK mainstream political debate now completely dominated by the voices of the right and far right; the SNP make a bold and electorally successful pitch against the ideology of austerity, but can do little or nothing to stop the spending cuts and low pay juggernaut, without extracting more taxes from those ordinary workers who have already suffered most.

Yet somewhere, behind the current roars of Tory triumphalism, the truth is out there; the truth that £1,600-an-hour-man George Osborne was one of the most disastrous chancellors in UK history, driven from the outset by radical right-wing ideology rather than practical economics. Tory economic policy since 2010 has drastically increased the national debt, slowed the economy precisely when it needed support, failed to invest in Britain’s industrial and energy future, inflicted untold harm and humiliation on some of the most vulnerable in society, and left Britain in the state graphically depicted in a Financial Times chart this week, which showed the UK alone of all the developed countries in the quadrant where GDP has increased substantially, while wages have slumped, by as much 10 per cent in real terms.

The Tories’ economic performance is dire, in other words, and their continuing austerity policy – affirmed by the Chancellor this week – nonsense on stilts. Yet what that graph also reveals, alas, is a people not yet prepared to wake up, look at the numbers, smell the coffee, and hand this bunch of guffawing reactionaries their richly-deserved marching orders; as well as a failure of leadership on the centre-left that has left the people at a loss for a serious alternative – not so much here in Scotland, where the SNP at least talks the talk of building a more socially sustainable future, but across a UK which, whether together or apart, surely deserves better than this.