‘No ques­tion’ that over­haul­ing gig econ­omy will put up firms’ costs

Kentish Express Ashford & District - - Business Kent Update - By Paul Fran­cis

A rad­i­cal over­haul of work­ers’ rights in the bur­geon­ing gig econ­omy could leave small busi­nesses in Kent fac­ing ad­di­tional costs, it has been claimed.

A ma­jor re­port on work­ing prac­tices – the Taylor Re­port – rec­om­mends that work­ers for firms such as Uber and De­liv­eroo should be clas­si­fied as de­pen­dent con­trac­tors, with ex­tra ben­e­fits.

But while there has been a recog­ni­tion of the need for changes to re­flect the grow­ing num­bers of self-em­ployed peo­ple, the re­port has di­vided opin­ion.

The gov­ern­ment com­mis­sioned re­port makes a se­ries of key rec­om­men­da­tions – in­clud­ing em­ploy­ers in the gig econ­omy pay­ing Na­tional In­surance con­tri­bu­tions for those who are cur- rently classed as self-em­ployed.

How­ever, bosses have warned it will push up costs and re­duce flex­i­bil­ity for staff.

Kent has about 135,700 self­em­ployed peo­ple, about 13.6% of the work­force – which is higher than the av­er­age for the South East at 12.1% and higher than the na­tional av­er­age of 10.6%.

How­ever, it is not known how many of these work in the gig econ­omy. Na­tion­ally, 1.1m peo­ple are thought to be in the sec­tor with the high­est num­ber – 28% – in ac­coun­tancy, le­gal ad­vice and con­sul­tancy. Just 9% work in courier or delivery ser­vices.

The re­port’s au­thor, Matthew Taylor, said peo­ple thought the gig econ­omy gives em­ploy­ers too much power. He said: “Of all the is­sues that were raised with us as we went around the coun­try, the one that came through most strongly was what the re­port calls one-sided flex­i­bil­ity.”

The re­port rec­om­mends that zero-hour con­tracts should be con­tin­ued where they pro­vide flex­i­bil­ity for both em­ployee and em­ployer – but with an op­tion for staff to re­quest a move into full-time em­ploy­ment.

Jo James, chief ex­ec­u­tive of the Kent In­victa Cham­ber of Com­merce, said it was im­por­tant that any changes did not un­der­mine the UK’s flex­i­ble em­ploy­ment mar­ket and bur­den busi­nesses.

She said: “While the no­tion of a wage pre­mium in ex­change for work­ing hours is at­trac­tive it could have con­se­quences and push up prices else­where.

“A lot of peo­ple do have these con­tracts by choice be­cause they are very flex­i­ble and they fit around peo­ple’s life­styles. So, although it is an area that needs look­ing at, a lot of peo­ple are do­ing it out of choice and it fits round their lives.”

She added: “The gig econ­omy is a grow­ing econ­omy and it is im­por­tant that it is looked at. We do need to recog­nise that it is not a one-size fits all. It is go­ing to put up costs, there is no ques­tion about that.”

She said any changes should “give flex­i­bil­ity and se­cu­rity to both sides”. The Fed­er­a­tion of Small Busi­nesses also sounded a note of cau­tion.

FSB na­tional chair­man Mike Cherry said: “We wel­come hav­ing a set of pro­pos­als on the ta­ble which at­tempt to strike a bal­ance be­tween fair­ness and a flex­i­ble labour mar­ket.

“The new ‘de­pen­dent con­trac­tor’ sta­tus, if done right, should bring pro­tec­tions to those un­fairly treated in the gig econ­omy, whilst also pro­tect­ing the gen­uinely self–em­ployed.

“How­ever, the tax sys­tem must con­tinue to recog­nise the risk and in­se­cu­rity faced daily by the gen­uinely self-em­ployed.”

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