Labour calls summit to develop new deal for the self-employed

John McDonnell says the world of work was changing

Shadow Chancellor of the Exchequer John McDonnell says he will be leading a summit next month of unions, self-employed workers and small businesses (AFP)

Labour is to convene a summit to develop a new deal for self-employed workers – recognising “that the world of work itself is changing”, the shadow chancellor has said.

John McDonnell told an audience at the party’s economic conference in Scotland that Labour would have roundtable discussions with trade unions, self-employed representatives, and business groups to work out a new policy settlement in the area.

The idea comes after the Chancellor Philip Hammond unveiled a National Insurance hike for self-employed workers in the Budget on Wednesday, prompting cries of opposition from some Tory MPs.

Mr McDonnell said: “The challenge for the next Labour government and the whole labour movement will be in securing the balance between the best possible protections for those in work – and recognising that the world of work itself is changing.

“The labour movement has risen to challenges like this in the past. It was born out of the struggle for decent pay and conditions when new technologies were ripping up existing ways of working.

“We need that same spirit and vision again. So I’ll be convening a summit next month of unions, the self-employed, and small businesses to develop Labour’s policy on self-employment.

“We want to win the widest possible support for a radical, Labour vision of how to adapt to a changing world.”

Self-employed workers will see their rate rise from 9 per cent to 10 per cent in 2018, with a further rise to 11 per cent in 2019. The Treasury expects 2.5 million people to be hit by the hike.

The Chancellor justified the policy on the basis that differences in benefits between employees and self-employed workers “have been very substantially reduced” in recent years.

The plan has also been backed by the respected Institute for Fiscal Studies, which says it will remove distortions in the tax system.

Over a dozen Conservative MPs have however publicly come out against the tax rise, with signs a rebellion is fomenting on the Government backbenches.