“Small firms are indispensable to the creation of jobs and of wealth.”
Margaret Thatcher, speech to small business conference in 1984
Thatcher’s Britain claimed to be about creating a nation of entrepreneurs starting small businesses and thereby generating wealth and jobs. In her 1984 speech to the Small Business Conference she said, “you will see the part that small firms are playing in economic recovery and creating jobs”. Fast forward to 2020 and that dream seems to have died. For the last decade her party has led a country in which it is increasingly difficult to realise that ambition of entrepreneurship.
Freelancing, the gig economy, self-employed, small business owners: these are phrases we use to describe those people who make a decision to work for themselves. A whole range of people either choose to be their own bosses, or are forced to by the nature of their work. Self-employed people can be people working in many sectors: hairdressers, pub landlords, electricians, chefs, builders, drivers, TV producers, massage therapists, cleaners, video producers, software developers, actors… and the list goes on. For example, many of the films and TV shows that kept us entertained during lockdown would not be produced without self-employed people. Imagine what our worlds would have been like with no box sets to watch?
We have a high percentage of freelance workers in Brighton and Hove. There are an estimated 29,000 people who work for themselves. Leaving the security of employment to set out on your own is a big decision. It means losing the stability of a salary every month and a company pension, it means administration to manage your accounts, your tax and other matters. There’s not a lot of help to get started, and, when you do, it’s hard work to make sure you have enough work to earn you enough money. Add to that the fact that you lose having paid holiday time and sick leave; it’s a risky and brave move to make.
There are people who choose to become self-employed, and for many more it’s the only way to get work in their chosen field. What hit most of these people like a sledgehammer was the sudden announcement of the lockdown in March. Many lost the majority of their income overnight. As they lack the protection of employment contracts, clients can often terminate whenever they want to, plunging people’s lives into chaos.
Then the furlough scheme was announced for businesses. Rishi Sunak famously said that “No-one will be forgotten” in one of his sterling press conference performances. As with all these rushed schemes in those weeks in March, they did forget people. Self-employed people were left on the brink of financial troubles as a result of being left out of that scheme. After campaigning from MPs, including a lot of work from Brighton Pavilion MP Caroline Lucas, another scheme was announced for people who are self-employed.
However, there were still many who fell through the cracks and received no support at all. Read our article outlining those who missed out on support and the ensuing campaigns and parliamentary debate on this topic. During the debate, Caroline Lucas MP for Brighton Pavillion said the government “has fallen short by failing to recognise the reality of what self-employment looks like in Britain today”.
Excluded and forgotten
Working for myself is not something I had ever considered doing. I enjoyed life as an employee and the sense of belonging that brings. For most of my working life I navigated working in companies and all that goes with it. I climbed the corporate career ladder to the dizzy heights of a role as Vice-President in a tech corporation, commuting, flying around the world, running a global team… all of which all meant working long hours and never being at home.
The appeal of working as a freelance consultant took me a while to consider. The more I thought about it, the more I thought it would appeal to my need for variety and for my desire to spend more time on voluntary work and creative projects closer to home.
The lockdown in March meant that the clients either put me on hold or cancelled. I knew that as I had only started working as a freelancer in October I was unlikely to get any government support. Turns out, the limited company model I use, as I have to for my line of work, meant that I got more support than some who got absolutely nothing. I could furlough myself for the maximum amount of £580 a month, which I only did for one month as the furlough scheme means you can’t do any work on your business, and I wanted to work on trying to generate new clients to replace those I had lost.
Kickstart?
My story turned out fine, as I decided to start a new business with two friends during the lockdown, turning a side hustle into a viable business. Not everyone is as lucky as me. Our new business has in itself been a lesson in which companies the government prioritises. Rishi Sunak announced the new ‘Kickstart Scheme’ to employ young people and create jobs. Great, we thought, we can employ a young person, provide training and then employ them full-time at the end of the scheme. The problem is, that the scheme is a kick to small businesses. You have to employ at least 30 people. So it helps all the big companies, but small businesses like us are left out.
With all that has happened to self-employed people, online forums are full of small business owners talking about taking roles at companies instead of carrying on their precarious positions. For those that can find a job, it’s easy to see why this appeals to them. The bigger question is, with small businesses often being the stimulus for growth and wealth, where does this leave the economy? In today’s parliament debate, MPs from across the house spoke about the self-employed being the innovators and entrepeneurs who generate growth. Ruth Cadbury, Labour’s MP for Brentford and Isleworth, said “these people generate economic growth,” and Richard Thomson from the SNP said “these are the people who are going to be driving the recovery”.
With the government not listening and refusing to meet with MPs who want to discuss this, is this now the point at which entrepreneurship will decline? As the government pours support into big business instead of the small entrepreneurs who could help get the economy back on its feet quicker, where does this leave our prospects for economic growth?
