The covid-19 crisis has had a dramatic impact on the UK’s economy. A small state, low taxes and pure free market economics have failed to prepare the UK for the public health crisis and the ever-present climate emergency.
The public health crisis has forced the Government to postpone this failed style of governance, in favour of an interventionist, corporate welfare policy, aimed at protecting the needs of capital, with the hope that benefits will trickle down to workers through business-first schemes. The post-covid-19 economy must have fair taxation and strong workers’ rights at its centre. Self-employed workers will be pivotal in our economic rebuild, and people who are genuinely self-employed deserve fair support while also paying their taxes.
The Opposition are fundamentally committed to promoting and advancing workers’ rights, so we are deeply concerned that IR35 reduces the rights of the worker and the responsibilities of the employer. It is essential that, during the review of IR35, the Government recognise the overlap between employment law and tax status, and do not see them as exclusive entities. An initial recognition of their interrelation provides the basis for levelling up self-employment protection and ending forms of self-employment that are used as cover for tax avoidance.
I am aware that some workers are forced into self-employment by employers trying to cut costs and reduce
their obligations. That was directly referenced by the Taylor review, which stated, based on evidence submitted to it, that
“the nature of the tax system acts as an incentive for practices such as bogus claiming of self-employed status, by both businesses or individuals.”
This highlights the importance of not assessing tax law in isolation. A joined-up approach that brings together tax and employment law can ensure that everyone pays their fair share of tax and that no one is exploited by holes in the system. It is vital that the Government recognise the relationship between poor employment practice, exploitative working arrangements and the tax system. Do the Government intend to introduce any additional measures to tackle the enablers of tax avoidance schemes, including those who exploit gaps relating to tax and employment law?
The precarious nature of certain forms of self-employment has made it difficult for many to access the coronavirus self-employment income support scheme. A large number of my constituents, including those working in the creative industries, cannot access SEISS as they receive less than 50% of their income from self-employment. Will the Minister consider introducing additional support that can be offered to those who receive less than half their income from self-employment, and who may also have been using short-term pay-as-you-earn contracts?
The covid-19 crisis has created a critical juncture in our country’s economy. I urge the Government to ingrain workers’ rights and fair taxation into the post-covid economy.
4.27 pm