New tax for Contractors will damage jobs.
With a bit of luck the looming IR35 row over contractors’ earnings will set off a badly-needed and hopefully explosive national debate about working patterns. It’s another industrial revolution. And it ought to be maturing and dominating our lives as did the original Industrial Revolution nearly two centuries ago.
If you listen to what Matthew Taylor, CEO of the Royal Society of Arts, says about this area of change in his “Good Work” Report to the Government and elsewhere, the two main points emerging are the need to protect those who lose out – and sometimes badly – and the issue of disguised employment. These are the foothills and, with some care, will be traversed in a bumpy but conclusive fashion. It is the mountain beyond that we need to be aiming for.
The sweep between typical and atypical (the words that some lawyers use) working patterns is very broad. It covers zero hours workers struggling to make ends meet all the way up to fat cats doing their own independent thing after a successful and highly remunerated c-suite role in a little-risk environment. In many ways, what we have now is an outcome of rapid change – such as happens in all industrial revolutions; it almost drives itself with little third party intervention. But it will need interventions – but of a different type that we currently have. It is about money and about lifestyle choices. But it is also about ethics and morals.
Consider, for a moment, Ken Loache’s latest film – Hidden Agenda. This film shines a light on zero-hours contracts and their effect on family life. So said the FT on 27.10.19. Loache’s latest gritty film paints almost a nihilistic picture of gigworking at the entry-level. Not enough to live on. No legal protection. No social network. Big unwanted risks. Mental health issues. This has to be morally wrong by any standards. But is it true – and/or widespread? Who should do what?
In a reassuring sort of way, this process has already started to happen:-
- Shareholder value is giving way to ESG? If not, what impact is ESG having?
- Different generations have differing views on work and the work ethic. Recognising these differences will effect major change.
- Places where people work are changing. Living where you want to live is increasingly NOT where you work – certainly not all the time.
- There will be real challenges for many – financially – socially- environmental and also infrastructure problems.
- Technology and AI is changing everything.
- The sort of work that people do is changing. Is STEM in danger of losing out. Tragic, if that happened. Technology is very largely where the future is.
- The shape of remuneration is changing – not enough for zero-hours workers. Too much for fat cats
The starting point is to understand the current statistics. If you look at the monthly ONS Employment Statistics Report and ask how many of the 33m UK working population are wholly full-time employees (and nothing else) on the permanent corporate headcount, the answer offered here is 55%. The other 45% are something different. It is this 45% that needs careful scrutiny and signposts the future. This is where the drivers will be found. Part of the debate is to challenge these figures. When you do that you will discover just how complex is this 45% – or whatever you think it is. It is changing all the time; resistant to definition. In fact, the best definition for this group may well be “Self Drive Worker”. Amazingly, this 55%/45% split has remained broadly the same over the last few decades. We may well be getting to the stage at which we will say that FTE (full time employment) is no longer the norm.
The issues here affect every aspect of human endeavour in the UK – Government, Businesses, Unions, Individuals, Influencers and Commentators.
- Government – Do they – and HMRC – recognise just how extensive atypical working actually is? If they do, they certainly seem to be undecided as to how to handle it. IR35 -as of now – Is a mess. Complex in areas to the point at which it can’t be understood; judgemental in areas to the point at which it is unrealistic and inconsistent. Nevertheless, the job and duty of HMRC is to levy and collect tax due.
- Businesses – Hurrah for atypical work. Cheap, quick and bid-able which, if true, is bad news for some and good news for others. But this is vital for today’s 24/7 working, flexibility and efficiency. But it must be crucial to have a balance. Not always achieved, particularly in periods of major change.
- Unions – Decreasing membership. Difficulties in finding new membership targets. Is their traditional mission of preventing abuse working? Clearly, it is needed more now than ever and adapting to new working models is important. Evolving working patterns always bring exploitation and abuse – and Unions need to be ready.
- Individuals – Doors close – new doors open? Of course, they do! And speeded up by AI. The challenge is to find these opportunities and profit thereby. Very, very, do-able. But, certainly, lots of change. Growing comment about the increasing importance of individuals – with increasing evidence that some appointments are becoming employee-driven. New sources of support will soon become available led by the likes of www.WorkingFree.co.uk.
- Influencers and commentators. They need more information, more ambition, more excitement. Expose abuse – but celebrate successes. Most observers will not fail to note that most Influencers and Commentators are Self Drive Workers.
Charles Russam, Managing Director – Devonshire House Network Ltd. And Working Free Ltd. O8081 565604 – charles.russam@DevonshireHouseNetwork.co.uk.