Matthew Taylor’s recently released Review of Modern Working Practice has been cautiously welcomed by industry leaders.
The independent review, which considers the implications of new forms of work on worker rights and responsibilities, as well as on employer freedoms and obligations, sets out 7 principles to address the challenges facing the UK labour market.
Recommendations to crack down on false self-employment through the creation of a new ‘dependent contractor’ status were welcomed, but with a warning that Ministers must not be allowed to widen the net on a whim.
Also welcomed was the call for the Government to focus on encouraging self-employed people to plan for the future, reducing the potential that the taxpayer has to pick up additional costs associated with ill health or inadequate retirement saving.
Mike Cherry, chair of the Federation of Small Businesses (FSB), says Matthew Taylor’s recommendations “strike a balance between fairness and a flexible labour market” but he said the government must “protect the genuinely self-employed from being dragged into a new category of dependent contractors”.
“The tax system must continue to recognise the risk and insecurity faced daily by the genuinely self-employed. Ministers must make no attempt to single them out for tax hikes.”
Neil Carberry, CBI managing director for people and infrastructure, adds: “The Taylor Review rightly recognises that labour market flexibility is a key strength of the UK economy, driving better outcomes for everyone. Businesses agree that flexibility must be matched with fairness, but building on our current approach, as the report concludes, is the right way forwards. The CBI is ready to work in partnership with the government to address the challenges the report raises.
“Spreading good practice, not just focussing on new laws, is something the CBI has long supported given the link between good employee relations and higher productivity, which is the only sustainable route to rising wages and better living standards. There is much for firms to like, as well as some valid challenges, in the seven steps the Taylor team has outlined.
“The Government will need to consider these aspects extremely carefully, alongside proposals for any future tax changes, to ensure our labour market retains the flexibility and entrepreneurship that has made it the mainstay of the UK economy.”
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