zero hour contracts

Just before Parliament broke for Summer recess, Emma received a letter of clarification from Margot James, the Parliamentary Under-Secretary for Department for Business, Energy and Industrial Strategy (BEIS) regarding a Question asked by Emma in the Chamber about tax anomalies and the Taylor report into working practices and the rights of self-employed and gig-economy workers.

On 11 July, the day the Taylor report was published, Emma asked Ms James, why over a million workers were being exploited by sham umbrella companies and bogus self-employment.

In the Chamber Emma said, “ Changes to tax policy are what is needed to tackle that, but the Government prohibited Matthew Taylor from making any firm recommendations on changing tax policy, so how seriously can we take the Minister’s comments today, and when on earth are the Government going to eventually address these tax anomalies?”

The Under Secretary of State brushed Emma’s question aside saying she assured her that “no bar was put in front of Matthew Taylor” that “he was able to investigate as freely and as fairly as he saw fit”.

Just less than a week after this exchange however, Emma received a ‘letter of clarification’ which fell well short of an apology, admitting that Emma’s assertion was in fact correct.

The letter said, “ln my response I stated that no bar was put in front of Matthew Taylor and that he was able to investigate as freely and as fairly as he saw fit.

Whilst Matthew Taylor was not prevented from looking at tax issues, and as I stated it will be for the Treasury to assess the tax situation, I want to make it clear that tax was not in in the terms of reference of his review.”

In fact, the terms of reference set by the Government had from the outset prevented the independent review from recommending that the Treasury close loopholes in the tax system.

The Institute for Fiscal Studies has highlighted that the current National Insurance system makes it considerably less expensive for employers to take on a self-employed contractor rather than a full-time employee.

After being commissioned to conduct the report, Mr Taylor is reported as saying, “We’re not empowered to make tax recommendations but we are looking at why we have the model of work we have and it is clear that part of what drives this is the tax advantages of self-employed status,”

One recommendation in the report, to establish a new category of worker – in reaction to the business practice of firms such as Uber and Deliveroo, which offer flexible working hours but little to nothing in the way of job security, holiday pay and healthcare cover overlooks the big issue – clarifying what self-employment actually is .

These “dependent contractors” will be differentiated from the fully self-employed, but Taylor recommends that, if these workers are under the “control” and “supervision” of an employer, they should be entitled to holiday and sick pay.

However, the report was a missed opportunity and didn’t go far enough to protect worker’s rights, because it has failed on the fundamentals of making any bold regulatory changes. What’s needed at the very least is a statutory definition of self-employment.

Exploitation of workers is at the heart of gig-economy business models – without regulation this system will inevitably continue.

In response to the letter Emma received from Ms James, Emma said,

“Clearly the Under Secretary of State for BEIS is not across her brief enough to know what the terms of reference are in a major report into business practice.

Whilst I am grateful for the clarification from her Office, it really ought to have come with an apology for suggesting that my assertion was inaccurate when in fact it was Ms James who may have inadvertently misled the House.”

You can read Emma’s question and the response here.


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