Spring Budget prompts UK creative industry concerns
Freelancers will be hit by tax rise for the self-employed but qualifications announcement praised.
UK chancellor of the exchequer Philip Hammond’s Spring Budget is “a slap in the face” for freelancers working in the creative industries, according to one media trade union.
The most controversial aspect of the budget has been the rise in National Insurance Contributions (NIC) for self-employed workers, from the current level of 9% to 10% in 2018 and 11% in 2019 for those making a profit of more than £8,060.
The hike will apply to freelancers earning less than £43,000. The government claims that this will raise £145m a year by 2021-22.
According to Creative Skillset’s 2015 employment survey of the UK’s creative industry workforce, 43% of all workers are freelance. In the film production sector, that number rose to 89%.
Bectu estimates that 15,000 of its 40,000 members are freelance.
Gerry Morrissey, head of Bectu, the media sector of trade union Prospect, described the move as “unfair and unjustified” in a media statement.
“This is a slap in the face for thousands of our freelance members, who have been hit by a unfair and unjustified increase in tax. Self-employed workers will be paying almost the same employment taxes as secure staff, without employee benefits, and the security, that staff have.
“Our freelance members are running genuine small businesses, carrying economic risk and paying many costs, without any guarantee of future work from any engager.”
“Raising their taxes will squeeze their already tight margins, and harm their standard of living. This is the exact opposite of what the government claims to be doing to help entrepreneurs. There is no problem of false self-employment, or disguised employment, in our sector,” Gerry Morrissey continued.
Writers’ Guild Of Great Britain acting general secretary Ellie Peers also commented on the NIC rise: “The increase in Class 4 NICs has been justified as levelling the playing field between employees and freelances, who now receive the same level of State Pension. But this is missing the point. Our freelance members don’t receive benefits such as maternity pay, sick pay or holiday pay, as employees do.
“On top of that, freelance writers have no job security, carry economic risk, and pay costs that employees do not have to. They are also already working on very tight margins and these changes will risk lowering their standards of living further.”
Andrew Chowns, CEO Directors UK, added: “Directors, in common with most other freelance workers in the creative industries, are rarely offered the option to be a permanent employee - self-employment is a necessity not a choice. The chancellor may have thought he was rebalancing a tax anomaly between permanent staff and the self-employed but there remains a massive discrepancy in employment rights and entitlement to benefits, with self-employed workers at a huge disadvantage compared with permanent workers.
“The burden of risk and uncertainty is carried by the self-employed. It seems premature to have taken this action on National Insurance Contributions before we see the results of the Matthew Taylor enquiry and the BEIS consultation into the future world of work, as there are vital wide-ranging and strategic issues about the world of work and working status that need to be tackled.”
Meanwhile, John Kampfner, chief executive of the Creative Industries Federation, praised the Budget’s commitment to technical training but also noted several concerns.
The changes to UK education will see the government invest £500m of additional funding per year into technical training from 2019-20 through proposed ‘T-levels’, one of which would be called ‘creative and design’.
Kampfner welcomed the idea but cautioned that these new qualifications need “to be considered in the context of the skills shortages in the creative sector and the potential for growth in the creative industries”.
“Young people will not be able to pursue careers in the creative economy, which already includes one in 11 of the workforce, if they do not study creative subjects in school,” the statement continued.
The Budget has also earmarked £740m for digital infrastructure, specifically in high speed and reliable broadband for consumers and businesses.
Kampfner called the move “welcome” but added that his organisation remains “worried that the role the creative industries play in innovation is being overlooked by the emphasis on innovation in science and tech”.
“We are concerned about the changes to national insurance contributions because the creative industries have a higher proportion of self-employed than other sectors and many of them are not highly paid,” he added on the NIC hike.