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Workers Rights, The Gig Economy and The Autumn Budget

I suspect that for Philip Hammond, the last budget seems like it happened mere weeks ago. But the thoughts of employers, employees and of all of us concerned with finances and tax are turning to the Autumn Budget 2017.

Budget predictions are proving to be as difficult as predicting election results, so let’s not venture too far down this route.

However, some of the topics that The Chancellor is going to have to address include workers rights and the rights of those working in the ever-growing gig economy.

The issue of workers rights has never been such political hot potato. Parties of all colours are jostling to be seen to be taking up the case of those on low pay and those on zero hours contracts. They have all spoken out about bogus self-employment arrangements and public sector pay.

The recently released Taylor Report, a Government review of employment practices in Britain, has paid close attention to the gig economy, making recommendations that those who work for some of its biggest names, like Deliveroo and Uber, should be classified as dependent contractors, but with extra benefits, to counteract the sense that workers in the gig economy hold few cards, while their employers hold many.

Any changes that come from the report remain to be seen at a time when the Government is going to have to fight to get any new legislation through Parliament.

But it seems likely there will be some shifts, since the amount of lost tax the gig economy costs the exchequer is significant – the TUC recently estimated the figure to be £4 billion.

And The Chancellor has already spoken of his desire to equalise taxes between the employed and self-employed, so this may be a suggestion he would be favourable to.

Other recommendations made in the Taylor Report, include:

  • Strategies to make sure workers are able to progress beyond the National Living Wage
  • A national strategy to provide quality work for all, for which government can be held accountable
  • Avoiding further increases to the non-wage costs of employing someone, like the apprenticeship levy

As Phillip Hammond found to his cost during the Spring Budget, changes to taxes or to National Insurance Contributions can cause a feeding frenzy, so whatever he decides to do he will have to tread carefully.

He has already hinted that he may lift the public sector pay cap in his upcoming budget, so perhaps we are now entering the pre-budget period that happens before every budget – the testing of the water, to see which policies will be palatable and which should be quietly dropped before publication.