IPSE welcomes Government’s ‘very positive’ response to Taylor Review

IPSE has welcomed the Government’s comprehensive response to Matthew Taylor’s review into modern work. Their considered and detailed response will need to be analysed fully, but IPSE welcomes their commitment to addressing serious long-term issues including both the uncertainty about employment status and the need for improved support for the self-employed.

IPSE is also pleased that the Government decided not to take forward the recommendation to move towards greater parity between employee and self-employed National Insurance Contributions (NICs).  

Chris Bryce, IPSE’s CEO commented:

“Overall, the Government’s response to the Taylor Review is very positive for the self-employed. Its pledges to clarify the confusion over employment status, define ‘good work’ and generally improve support for the self-employed are particularly welcome. The key thing now though is that the Government doesn’t kick these pledges and consultations into the long grass. We will be working closely with the Government in the coming months to make sure that this does not happen and that any coming changes help and support the self-employed.”

On NICs:

“We were particularly pleased that of Taylor’s 53 recommendations, the one the Government has decided not to act on was his call for a move towards parity between employee and self-employed NICs. The self-employed currently pay a lower level of NICs because by providing flexible expertise for businesses across the UK, they take on much higher levels of business risk than their employed counterparts. Through their freedom and flexibility, the self-employed add huge amounts of value both to businesses and the wider economy. They should not be punished for this with tax rises.”

On employment status:

“The world of self-employment has been shrouded in confusion for some time because of the lack of clarity about employment status. We were therefore extremely pleased to see the Government committing to address this with an extended consultation. We will be closely involved with this, pushing for what we believe is the only truly effective solution: a statutory definition of self-employment. Because, while ‘employee’ and ‘worker’ status are both written into law, there is still no legal definition of self-employment.

“The confusion in the self-employed sector is worsened by the misalignment of tax and employment law. This is because the off-payroll working rules, which came into force last April for the public sector, impose one status for tax and the opposite status for employment rights. We were pleased to see the Government committing to address this problem.

“The Government’s commitment to give workers across the board the right to a ‘day-one list of rights’ should also help to clear some of the confusion about employment status.

“Another positive for IPSE was the fact that the Government has not fully accepted Taylor’s proposal to change ‘worker’ status into a new and reformed ‘dependent contractor’ status. IPSE was concerned this would only add to the confusion in the sector and that the new status could even be too reductive. It is certainly positive that instead of adopting the new status, the Government has committed to consulting on changing the tests for worker status.”

On unpaid work:

“It is definitely positive to see the Government committing to supporting workers in the UK by ‘cracking down on sectors where unpaid interns are doing the job of a worker’. For a long time, IPSE highlighted the growing problem of unpaid work through its joint campaign with the Freelancer Club, NoFreeWork. It is excellent that the Government has taken this concern onboard. It is important to remember, however, that it is not just interns who are losing out: freelancers across the UK – especially in the creative industries – are losing thousands of pounds a year because of non-paying clients.”

On improved support:

“Another very positive aspect of the response is  the Government’s agreement that it will help to improve support for the self-employed in a number of ways. The lack of pension provision among the self-employed has been a growing concern for some time: it is excellent that the Government has pledged to explore ways to ‘improve pension provision among the self-employed’.

“The Government was also absolutely right to take up Taylor’s recommendation that it should ‘bring together employers and the education sector to develop a consistent approach to employability and lifelong learning’. Ongoing training and skills development are major issues for the self-employed, and the Government can help by making training tax deductible for them (as it is for employees) and by collating and certifying reputable courses to help the self-employed find and choose the right training.

“The one area here where the Government’s response is lacking is parental benefits. Although the Taylor Review recommended improved parental benefit provision for the self-employed, the Government does not seem to have taken this forward. It is unjust that while employees can receive both paternity and maternity pay, self-employed mothers only receive a much smaller Maternity Allowance and self-employed fathers get no benefits at all. The Government can add to the many positive commitments it has made in response to the Taylor Review by consulting on ways to improve parental benefit provision for the self-employed.”