The political pledges attempting a balancing act for the flexible workforce

General Election 2024 sign in front of Westminster

If you are a freelancer, self-employed or have your own company, how should you vote? Matt Fryer helps us decide.

In the lead up to the UK General Election the main political parties are making campaign pledges to support the flexible workforce and hopefully sway self-employed voters. But what exactly are the Conservative and Labour parties promising, and how will it actually impact the flexible workforce?

Scrapping National Insurance for self-employed

One of the key pledges from the Conservative party to support the four million self-employed workers in the UK is to scrap National Insurance (NI). The cut is expected to cost approximately £2.6bn a year, on top of the £6bn a year cost of reducing employee NI by a further 2p.

But the devil is in the detail – this pledge would only benefit unincorporated sole traders. Contractors working via agencies aren’t given the option to work in this way so will once again be overlooked. This population of voters has been penalised by the removal of benefits like the flat rate VAT scheme and the introduction of the off-payroll rules (also known as IR35) in recent years.

For the Conservatives to truly engage the flexible workforce, we need to see a tax incentive targeted at contractors working via their own limited company. This would be a welcome boost to the flexible workforce, recognising its contribution to the UK economy and encouraging its growth.

The full consultation promise

There were few surprises in the Labour Manifesto, which promises to strengthen the rights and protections of the self-employed, employers and workers. Employers and hirers will welcome, though, the promise made of a full consultation before any new legislation is passed.

Keir Starmer’s balancing act is to improve workers’ rights and protections in a way that also works for businesses. The key area where this will be a particular challenge is for the flexible workforces that keep our economy going. The trick will be to protect gig workers whilst avoiding unintended problems for independent contractors and freelancers.

If not properly thought through, simplification of employment status could further penalise independent contractors, while a ban on zero hours contracts could prevent businesses from accessing workers as and when they are needed. Unintended consequences could range from further worker exploitation and a return to a widespread rise in illegal tax avoidance schemes to a restriction of economic growth and gaps in frontline services.

Contractors crucial to economy health

Contractors and the flexible workforce is crucial in keeping our hospitals and schools open, building our homes, keeping our IT systems up to date and delivering engineering and infrastructure projects that keep the country moving. Keeping everyone in the flexible workforce and its supply chain happy is no easy feat but ensuring that businesses can access a pool of skilled workers, as and when they are needed, is essential to ensuring the health of the UK’s economy and public infrastructure.

Matt Fryer is Managing Director of Brookson Group

Matt Fryer

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