Prime Minister Andy Burnham is facing fresh calls to overhaul paternity pay for the self-employed, with a leading right-leaning think tank urging him to introduce a new Paternity Allowance worth £194.32 a week for two weeks. The proposal, from Bright Blue, would mark the first time self-employed fathers have ever received paid paternity leave.
Bright Blue's Proposal for Self-Employed Fathers
Bright Blue, which describes itself as a leading think tank for centre-right ideas, has written to the Makerfield MP, who now leads the Labour Party, to press for the change. The organisation argues that the current system leaves self-employed workers without the same safety nets as employed staff, and that the new allowance would address a long-standing gap in support.
Under the proposals, the Paternity Allowance would be set at £194.32 per week for two weeks, mirroring the rate of Statutory Paternity Pay. This would be a significant step for the UK's 4.2 million self-employed workers, many of whom have no access to paid leave when they become parents.
Pension Auto-Enrolment for the Self-Employed
In addition to paternity pay, Bright Blue is also recommending that the government auto-enrol self-employed workers into a pension scheme through the Making Tax Digital system. The proposed contribution would start at 1% of earnings, rising gradually to 4% over six years. The government would also contribute, starting at 1% and phasing up to 3% over the same period.
The think tank argues that this would help address the retirement savings gap among the self-employed, who are significantly less likely to have a pension than employed workers.
Alarming Statistics on Self-Employment Insecurity
The call comes as new research from Bright Blue reveals the precarious financial situation facing many self-employed people. According to the think tank, 37% of self-employed workers in the UK have been unable to find any work at all at least once in the past three years. This figure rises to a majority (52%) among those from low-income households, defined as earning less than £20,000 per year.
The research also found that a quarter (25%) of self-employed people have no savings of any kind, increasing to 37% among those from low-income backgrounds. Furthermore, 27% have no retirement savings whatsoever, including 26% of those aged 50 to 64. Among low-income self-employed households, the figure jumps to 43%.
Lack of Insurance and Sick Pay Coverage
Insurance coverage is also worryingly low, with 42% of self-employed people holding no insurance at all—whether contents, life, health, capital, wage, or sick pay. For those from low-income households, this rises to a clear majority (62%).
Health issues are also a major concern, with 42% of self-employed workers reporting that they have been unable to work due to poor physical health at least once in the past three years, and 34% citing poor mental health. There is currently no equivalent of Statutory Sick Pay for the self-employed, leaving many without income when they fall ill.
Unfair Trade-Off: Self-Employment vs. Government Support
Bright Blue's research suggests that many self-employed people feel the current system is unfair. Only 20% believe that the trade-off between the benefits of self-employment and the relative lack of government support is fair, while 43% say the benefits do not make up for the lack of support.
These findings highlight the urgent need for reform, according to the think tank, which is now calling on Prime Minister Burnham to act. The proposals for paternity pay and pension auto-enrolment are part of a wider package of measures aimed at supporting the self-employed, who have been disproportionately affected by economic instability in recent years.
What This Means for Self-Employed Parents
If implemented, the Paternity Allowance would be a landmark change, giving self-employed fathers the same rights to time off work when a child is born as their employed counterparts. Currently, self-employed fathers have no statutory right to paternity pay, forcing many to take unpaid time off or rely on savings.
The pension auto-enrolment scheme would also provide a much-needed boost to retirement savings for a group that is often overlooked in policy discussions. By using Making Tax Digital, the government could seamlessly integrate contributions into the existing tax system, reducing administrative burdens.
Reaction and Next Steps
The proposal has been welcomed by campaigners for self-employed workers, who have long argued that the current system is outdated and penalises those who choose to work for themselves. A spokesperson for the think tank said, "The self-employed are the backbone of our economy, yet they are too often forgotten when it comes to social protections. These measures would help level the playing field and ensure that self-employed parents and retirees are not left behind."
Prime Minister Burnham has not yet responded publicly to the proposals, but with his Labour Party commitment to workers' rights, there is growing pressure on him to act. The think tank's research provides a compelling case for change, and it remains to be seen whether the government will take up the mantle.
