Think tank calls for a ‘New Deal’ for self-employed people

05 July 2022

Self-employed people in Wales need a new deal to boost their financial security, says Wales’ most influential think tank, the Bevan Foundation

Self-employment has increased in the last ten years and now accounts for nearly one in seven workers across Wales. The proportion is even higher in rural areas such as Powys and Ceredigion. 

While working for yourself can bring many advantages, for some self-employed workers it brings financial insecurity and poverty.  The Bevan Foundation has found the average income of a self-employed person is less than two-thirds the income of an employee.  In addition, self-employed people have to cope with fluctuations in work and they often cannot get the help that is available to employees on a low income. The Bevan Foundation’s Director, Dr Victoria Winckler, said:

“People who are self-employed face a triple penalty. They struggle to make ends meet like other low-income workers, but with added uncertainty and fewer sources of help.  We want to see a new deal for self-employed people to help to solve these problems.”

The Bevan Foundation is calling for the Welsh Government to take action. The think-tank says it should do more to support self-employed people to run their business better to increase their incomes, for example by providing micro-loans and bite-sized training.

But because many people opt for self-employment to manage caring responsibilities or a disability, or because there are fewer other opportunities locally, the Welsh Government should also encourage different ways of promoting businesses for example using co-operative and mutual models.  Report author, Dr Mark Lang, said:

“Self-employed people could work together to sell their goods and services – this would give them lower costs and greater control over their affairs. We think cooperatives have great potential to boost people’s incomes.”

Self-employed people on a low income are especially hard-hit by unexpected events like sickness.  Unlike employees, they cannot usually get minimum sick pay and are sometimes denied other social security benefits. The Bevan Foundation is calling for Welsh grants and allowances to people on low incomes to make sure that they do not exclude people because of their employment status.

The Bevan Foundation’s calls for a ‘new deal’ are endorsed by business and unions alike.  Shavannah Taj, General Secretary of the Wales TUC said:

“The Wales TUC welcome the Bevan Foundation report which shines a light on important issues and has produced some really good recommendations.  We look forward to sharing the report with our Wales affiliates and wider networks.”

Karen Barker, Head of Policy and Research at abrdn Financial Fairness Trust, said:

“Policy has not kept up with changes in the labour market; this needs to be addressed now so many people in Wales are self-employed. It’s not right that people who are self employed should be at higher risk from income shocks.”

Read the report