11:04, July 12 69 0 theguardian.com

2017-07-12 11:04:04
The Taylor review overlooks the big issue – clarifying what self-employment is

Matthew Taylor’s report into modern working practices makes some important recommendations that, if implemented, could make a real difference to thousands of people. However, the report falls short of solving the most pressing issue facing the UK’s flexible labour market – clarifying what self-employment is.

Flexibility needs to work both ways, Taylor says, and he is absolutely right. British consumers, businesses and the wider UK economy have greatly benefited from the flexibility offered by freelancers, gig economy workers, those on zero-hours contracts and the self-employed.

That flexibility helps businesses to cope with peaks and troughs in demand and enables them to be more innovative. It gives consumers the option to hail a cab at any time day or night, or have whatever they want to eat delivered to wherever they are at any time. It also generates a lot of money and it attracts foreign investment – international companies like setting up a base here because they see the advantages that our flexible labour market can bring to their business.

Self-employment should mean being able to decide when and how you work, fitting it around other commitments and responsibilities such as childcare. The number of freelancing mothers has increased by 79% over the last eight years (pdf) – far faster than the growth rate for the self-employed overall. Beyond that, it is often an empowering and rewarding way of working. This came across clearly in Taylor’s report.

However, instances where individuals are misclassified as self-employed must be resolved. Taylor goes some way towards it – the report calls for clearer legislation on status – but what’s really needed is a statutory definition of self-employment. Currently self-employment is a default category assigned to those who are neither employees nor workers. If we are to have any meaningful understanding of who is genuinely self-employed, we first need to be clear about what self-employment is.

Taylor wants to rename worker status dependent contractor’. This might bring some benefits, insomuch as it might help individuals to self-identify as being within this category – but how will we be absolutely clear who falls into this group? According to Taylor it will still be up to the courts to rule on employment status, which is a big hurdle for individuals who suspect their status is different to what their employer sets out, like the recent Pimlico Plumbers case.

It is also a problem when HMRC challenges a person they believe to be falsely self-employed. These cases can be lengthy and HMRC hasn’t always got it right. For example, Mark Fitzpatrick, a freelance designer from Bristol, was pursued by HMRC for seven years before he was cleared of all wrongdoing by a tribunal. Giving self-employment a clear definition will make us less reliant on court decisions.

In the Association of Independent Professionals and The Self-Employed’s (IPSE) submission to the Taylor Review, a list of criteria was put forward, against which employment status could be judged. The list took many factors into account, including the matter of whether or not the worker is controlled by their employer – which Taylor appears to think should be the sole determining factor. This is too simplistic an approach to take. Looking at the entire picture of working arrangements is a better, fairer way to determine someone’s employment status. Factors such as the ability to choose when and where to work, and whether the work is project-based need to be considered.

What comes through strongly is a recognition that, on the whole, people like being self-employed. We will now have to wait and see how much appetite there is to legislate. The Prime Minister, while welcoming the report, fell short of making a firm commitment to do this.

There can be no doubt that the way people work is changing and the UK must catch up. If we are to fulfil our potential as a country, there is no other option.

Andy Chamberlain is the deputy director of policy at IPSE

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