New Chancellor Must Recognise Power of Temporary Workforce in Autumn Statement

As our new Chancellor Phillip Hammond prepares to deliver his first Autumn Statement, he must be mindful of recent events and the importance of the UK’s temporary workforce as a catalyst for economic growth.

UK PLC has been under an immense amount of pressure in recent years and that looks set to continue in light of events ranging from the Brexit vote to Donald Trump being elected as the 45th President of the United States.

Despite these global pressures, the UK has proved to be resilient and we consistently recover from dips in the economy faster than most of our partner nations. This is because we have been able to utilise our powerful temporary workforce.

Everyone recognises the importance and value of this rich pool of freelance expertise and our Chancellor must use this Autumn Statement to support that workforce and avoid the mistakes of his predecessors who have restricted its potential.

The modern way of working and the gig economy

The UK has an army of contractors, consultants, freelancers and other self-employed people who deliver the expertise our core industries need on a temporary basis. This is the modern way of working. Now, more than ever, companies have to be able to respond swiftly and be flexible in the way they work. This means they call on freelance experts to deliver the skills they need.

Similarly, this army of almost five million freelance workers want to operate in this way. It delivers them the freedom they desire, enhances their skills and experiences and allows them to operate in a more tax efficient manner.

The rise of the gig economy further supports this. Firms like Uber, Deliveroo and Hermes all make use of freelance drivers and, despite the recent ruling that two Uber drivers should be classed as employees, the majority prefer to operate under this freelance model.

What is needed from Philip Hammond’s Autumn Statement?

So, what does this mean for our new Chancellor as we head towards his first oppurtunity to make an impact? Despite the importance and power of the UK’s temporary workforce, and the critical role it played in dragging the country out of the 2008 recession, this sector has been hit with a multitude of detrimental levies, rules and regulations.

The new tax rules and legislation have placed a drag on one of our most critical tools for economic success and the new Chancellor must put a stop to that.

UK PLC needs the flexibility of an agile and diverse temporary workforce, especially as we begin the process of Brexit.

Prime Minister Theresa May has launched a major Employment Review as she recognises employment laws must be overhauled to meet the needs of the modern workplace. I’m asking the Chancellor to follow suit and recognise that businesses have evolved. He must not impose any further rules and regulations and make it easier for this sector to operate.

New tax rules for public sector workers

Another key challenge for the Chancellor is the proposed controversial reform of the intermediaries legislation (IR35) for off-payroll workers in the public sector. These plans have the potential to drive swathes of people out of the public sector. Arguably, this sector needs temporary expertise more than most.

HMRC claims around 20,000 people will be caught up by these new rules but our partners say that figure is much higher and could potentially represent 10 per cent of the entire public sector workforce.

The key issue with these reforms is the level of complexity involved. Far more will assume they are caught by these rules than will actually be the case and the proposed HMRC tool for people to use will be onerous at best.

We need to see clear definitions and far simpler tests if these proposals are to go ahead. There is a huge amount of confusion and, if the reforms are pushed through, we will see a big impact on public sector services.

How will the Chancellor deal with Brexit?

Much has changed in recent months following the Brexit vote and I predict that the Chancellor will have to make sweeping changes.

Following Brexit, his top priority will be to attract new businesses to the UK and deliver incentives for our existing businesses to remain in this country.

If Phillip Hammond changes key things like basic tax and VAT, he will bring the UK population along with him and he will be able to steer us out of a potential downturn when the Brexit process gets underway.

However, he can’t risk penalising entrepreneurs and that should mean we see a range of business-friendly policies that will bolster the economy ahead of a lengthy Brexit battle.

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