Home News Relief for the self-employed as Greg Clark responds to Taylor Review

Relief for the self-employed as Greg Clark responds to Taylor Review

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It was a surprise to many when Theresa May chose Matthew Taylor, Tony Blair’s former policy chief, to write a report on employment practices.

His report published last summer made dozens of recommendations including tax increases for the self-employed.

You can read our analysis of the Taylor Review here.

The Government responded this week, and while Business Secretary Greg Clark endorses many of Taylor’s recommendations, plans to hit the self-employed are notably absent.

Instead, the response talks about “supporting the self-employed” and states explicitly that the Government has “no plans” to revisit the issue of raising National Insurance contributions for self-employed workers.

We were concerned by the direction of government policy, which appeared anti-enterprise and hostile to the self-employed in particular.

Rob Johnston, Chief Executive of Cumbria Chamber of Commerce, said: “The rhetoric has changed. We were concerned by some elements of the Taylor Review when it was published last July.

“He was clear that he wanted the self-employed to pay more tax and was even proposing a cashless payment system to stop self-employed workers from under-declaring their income – surely a sledgehammer to crack a nut.

“A few weeks earlier, the Chancellor had attempted to increase National Insurance contributions for the self-employed in his March Budget, only to climb down in the face of opposition from backbenchers.

“We were concerned by the direction of government policy, which appeared anti-enterprise and hostile to the self-employed in particular.

“We’re relieved that, in his response to the Taylor Review, Business Secretary Greg Clark is no longer banging that drum.”

So what else is Greg Clark saying in his response to Taylor?

The Government acknowledges that the flexibility of the UK labour market has been a major factor in allowing the UK to achieve record employment levels and the lowest unemployment rate since 1975.

It agrees with Taylor’s ambition that “all work in the UK economy should be fair and decent with realistic scope of development and fulfilment” and sets out how this might be achieved.

The Business Secretary is promising legislation to “improve clarity” on the boundaries between employment and self-employment and will consult on how to achieve this.

He will also consult on plans to strengthen protection for agency workers, including the option to repeal the ‘Swedish Derogation’ that allows work seekers to opt out of equal pay entitlements.

There is a pledge to ensure workers receive more information on their employment rights, such as sick pay and holiday entitlement, and to be more rigorous in enforcing existing employment law.

Allied to this, the Government plans to simplify the enforcement process for employment tribunal awards, to name and shame employers that fail to pay such awards, and require tribunal judges to consider stronger punishments for employers that have ignored previous judgements.

It will ask the Low Pay Commission to explore the impacts of bringing in a higher National Minimum Wage for workers on zero-hours contracts to reflect the fact that they lack the security of having regular working hours.

There isn’t too much here to worry employers that treat their workers fairly.

And it is committed to providing a right for all workers to request a more predictable contract.

Rob added: “The Government is clearly trying to strike a balance between strengthening employment rights, where it feels employees are being exploited, without impeding the flexibility of the UK’s labour market which has been so successful in creating and sustaining jobs.

“There isn’t too much here to worry employers that treat their workers fairly – and in our experience the vast majority of Cumbrian employers do exactly that.

“We detected a sinister anti-business rhetoric from politicians in all the main parties last year. Hopefully the tide is turning.”

The Director General of the British Chambers of Commerce, Adam Marshall, met Jeremy Corbyn and senior Shadow Cabinet members last week to emphasise the huge contribution businesses make to British society and to seek a more positive tone on business issues from Labour.

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