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One such meeting was organised and chaired by the Labour Small Business Forum which is run by freelancer Philip Ross. Philip, a long-term Labour supporter and anti-IR35 campaigner, explains the issues which were debated there. (Invitation to Labour small business fringe meeting - Shout99, Oct 2012).
Philip writes:
At conference and in the fringe meetings, there had been much talk about finance, innovation and the changing of the work place. That small business will be the driver that propels the economy forward was common currency. The recovery will not be led by a few large firms but by many small ones. The need to empower small business isn’t just about the economy it is about empowering a generation.
Then it was the turn of the Labour Small Business Forum's fringe meeting. The Forum is a network of Labour members and supporters who work for themselves or in a small business. As chair of the fringe meeting I set out my credentials and in particular the fact that I had opposed the introduction of IR35 and helped to create the PCG while remaining a Labour supporters.
I pointed out to nods from the 50+ audience that the tax abuses that are usually quoted about so-called service companies mainly tend to come from the public sector, people who while claiming to be self-employed are still having their pensions paid by their employer/client (Ed Lester and the BBC). Yet it would be private and genuine freelancers who will bear the brunt of any legislative changes. (My book, Freedom to Freelance, explains how similar issues contributed to the creation of the original IR35).
After my introduction in which I stressed the importance of modernising the way we work and supporting emerging firms and freelance working, John Walker the national chairman of the Federation of Small Business picked up on my comments about IR35 and agreed that it was a complicated and unwieldy tax that has not been resolved and was a bar for going into business. He reiterated the familiar problems that small businesses have with getting hold of finance from the banks.
Crowdfunding
He was followed by Dr Jo Twist of the UKIE (the trade association for the UK’s games industry) she talked about the phenomena of crowdfunding which was a way that investors could lend to companies directly using the internet as a platform and thereby circumnavigating the banks. (Contractor had of course been crowdfunding pioneers when they founded the PCG). She noted the growing number of small micro-firms that start in the games industry. She said that they have lobbied successfully to reintroduce coding into the curriculum at school so people will not only know how to use WORD but could write one too. Afterwards someone said to me that IR35 has meant that if you are a technical person once upon a time you could have gone contracting to raise some finance to set up a software house but not now.
Innovation
Following on the theme of innovation was Richard Little from the PPMA. He has a manufacturing background whose success comes in part from design and development. He talked about patents and the need for Britain to celebrate its status as a nation of inventors and innovators, rather than being embarrassed by it. Next up was Emily Thomas, who had been a special adviser at the Treasury she spoke on the difficulties in setting employee owned businesses and the amount of bureaucracy that is involved. She noted that Government spends billions of pounds each year on procurement and needs to do more to ensure that more of these contracts go to small firms.
Shadow Minister Toby Perkins MP, who had run his own firm before entering Parliament pledged that Labour would support Vince Cable's plans for a British Investment bank, though he suspected that the coalition may not complete delivery of it but Labour would finish off when re-elected. He noted the importance of skills and the technical baccalaureate and welcomed Jo Twists discussions about crowdfunding and also about the diversity of business ownership.
The meeting rounded off with a number of questions from the audience whose number now included Chris Leslie MP, the Shadow Financial Secretary. What was clear from all the speakers, the questioners and the discussions that carried on afterwards was that finance remained a big issue for small business; IR35 remained unresolved and that the workplace has changed.
There are no jobs for life, or even careers for life and people will switch in and out of employment and self-employment and many will work in a small business and that freelancing is an integral and essential part of our business landscape.
Afterwards someone remarked to me that if Labour can show that they get what it is like to be self-employed, to run a business or to be freelance and can innovate with issues like business finance then they’re on the right path. For freelancing it was suggested to me that the abuse of limited companies by individuals isn’t on - as seen at the BBC - but IR35 was too extreme. I said that’s true but freelancers are forced by the market to use limited companies but are then penalised for it by the tax man I was going to suggest that perhaps there was a ‘third way’…. But I didn’t think you can get away with saying that - even at the Labour conference.
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Susie Hughes © Shout99 2012
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