One Minister lauds self-employment, another says false!

David Jackson | 13th May 2014

News that Britain’s army of self-employed has risen to a new peak of 4.5 million – perhaps because welfare reforms are encouraging people to set up as freelancers – has been enthusiastically greeted by Work and Pensions Minister Iain Duncan Smith. He says: “The growth in self-employment is both a sign and a result of the economic recovery this Government is delivering. We should welcome this sign that the entrepreneurial spirit is alive and well in the UK.”

Maybe he should have a quiet word with colleague David Gauke, who as Exchequer Secretary to the Treasury is taking a very different line with the introduction of the new regulations for Onshore Employment Intermediaries that will bring about – perhaps as an unintended consequence – the creation of false employment for those freelancers who seek independence through self-employment.

According to Mr Gauke’s own consultation documents, the Government anticipates that 170,000 construction operatives currently paid by intermediaries and taxed under the CIS, will be taxed under PAYE – a denial of their right to be self-employed.

Hudson Contract made written representations to the consultation in January, so I was disappointed to see that we have not been credited in the reported findings as having submitted a response. (Still, at least we ensured the Treasury was in possession of the Burke Report, an independent research study published by Cranfield University that confirms the valuable economic role of freelancers in the construction workplace. . . )

It was Tony Blair who used to talk about joined-up Government – a concept that appears not to have caught on in the Palace of Westminster. Then again, it does seem to be so typically political that while one Minister is eager to take credit for the growth of self-employment, along a neighbouring corridor of power, a colleague seems so easily persuaded by unfounded propaganda about wholesale bogus self-employment, not to mention the compelling prospect of an extra tax grab.

And just in case you’d like further evidence of disjointed Government, I can’t help but recall the Department of Business’s half-term report on employment in the UK: the document ran to over eighty pages – and included just a single line of recognition to those 4.5 million people in self-employment.

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