Regulation reforms potential employment shift

By | Business
Self-employment has accounted for 44% of all employment growth since May 2010 - Image Credit - www.abcnews.go.com

Plans have been confirmed for 336 regulatory reforms, according to the Department for the Environment, Food and Rural Affairs, Defra. They aim to ensure the UK’s very high welfare, environmental and food quality standards are upheld and remove unnecessary regulatory issues on business.

The changes are expected to save business £300million each year, or £1.5billion over five years, an increase on previously estimated savings of £1 billion. The savings are expected to represent a third of all savings to business coming from planned government reforms to regulation through its Red Tape Challenge initiative.

The reduction points include better guidance on how to comply with environmental legislation, which will be much easier to follow – after being reduced by 80 percent in volume. In addition, Defra aims to reduce the time spent by businesses reporting information to the Department and its regulatory bodies and agencies by 20%, saving business some 850,000 working hours by April 2016. The department and its nine agencies, which include the Environment Agency and Marine Management Organisation, plan to consolidate legislation, reducing the overall number of regulations by 20% since 2011.

Secretary of State for the Environment, Food and Rural Affairs, Owen Paterson said on the announcement: “I am determined to see less regulation and importantly better regulation with the same high standards. However, with rules that are much clearer and easier to use. For the overwhelming majority of organisations behaving responsibly, I want to let them get on with important issues in their business. That is the best way of ensuring small businesses prosper, bringing security, jobs and growth. It also gives us in government more time to focus on the people.”

Peter Young, Chairman of Aldersgate Group, an alliance of leaders from business, politics and society interested in a sustainable economy, said, “The Defra approach has embraced the opportunity to deliver streamlined, more effective regulation. In so doing the environment can be better safeguarded and business growth is enabled.”

An interesting employment point is that recently many people have chosen to go independent. According to analysis from the Trades Union Congress (TUC), self-employment has accounted for 44 percent of all employment growth since May 2010.

This is despite the fact that self-employment is a relatively small part of the UK jobs market. Over 40 per cent of all the self-employed jobs created since mid-2010 are also part-time. The TUC is concerned that many people are only taking this kind of work because they are unable to find good quality employee jobs, which provide the stable employment they really want.

The TUC’s analysis also shows that the number of people starting their own businesses has fallen in recent years, in spite of rising self-employment. The biggest growth areas of self-employment since mid-2010 have been people working for themselves increasing by 232,000. Freelancing has increased by 69,000 or sub-contracting up 67,000.

The number of self-employed people who either run a business, or are a partner or sole director in one has actually fallen by 52,000. These figures show that rising self-employment is part of a wider shift towards insecure employment, rather than as a result of a growing number of people starting up new companies, as ministers like to claim, says the TUC.

Self-employment has been going up steadily since early 2008, even when unemployment was rising sharply, and has increased even more in recent years.

The TUC is concerned that the growth of self-employment is at the expense of more secure employee jobs. Many newly self-employed workers do the same work as employees nevertheless with reduced job security, lower working conditions and often reduced take-home pay, says the TUC.

Resolution Foundation research found that earnings from self-employment fell by a fifth between 2006 and 2010, while official figures published by Parliament found that the average annual income from self-employment is lower by £10,000 for women.

The TUC is notes that self-employment, agency work and zero-hours contracts are becoming a permanent feature of the labour market, even as the economy recovers. The growth of casualised work is likely to continue to hold back wages, and limit people from having the kind of secure employment they need to pay their bills, save money and plan for the future, suggests the TUC.

Many people believe that becoming self-employed or independent carries many issues, what are the positive aspects of more people becoming self-employed or independent? For example, higher levels of innovation in the economy.

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