The Federation of Small Businesses (FSB) has cautiously welcomed today's Taylor Report on the self-employed and the gig economy.

Matthew Taylor's Review of Modern Working Practices says companies with a "controlling and supervisory" relationship with workers should pay a range of benefits.

It also suggests there should be a new category of worker called a "dependent contractor", who should be given extra protections by firms such as Uber and Deliveroo.

The FSB says it welcomes the recommended crack down on "false self-employment", which is clearly distinct from the genuinely self-employed. But it warns that Ministers must not be allowed to widen the net on a whim.

The FSB supports the principle that the Government should recognise the wide variety of forms of modern self-employment and should act to support and protect those who need help.

It also welcomes the call for the Government to focus on encouraging self-employed people to plan for the future, reducing the potential that the taxpayer has to pick up additional costs associated with ill health or inadequate retirement saving.

The FSB adds that UK small businesses already provide good quality jobs within their local communities and must not be hindered from this with disproportionate reporting requirements and bureaucracy.

FSB national chairman Mike Cherry, said: "We welcome having a set of proposals on the table which attempt to strike a balance between a 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.

"It's positive that the Review promotes self-employment as a careers choice. It's right skills, productivity, savings and the cost of employment are highlighted as key issues for the Government to address. Collective action and collaboration can play an important role in this.

"However, the tax system must continue to recognise the risk and insecurity faced daily by the genuinely self-employed - this is right in principle. Ministers must make no attempt to single out them out for tax hikes.

"Government and Parliament must now protect the genuinely self-employed from being dragged into a new category of dependent contractors. Legislation must not be so broadly drafted as to give Ministers the power to widen the net on a whim without robust Parliamentary oversight, in a way that hurts the genuinely self-employed."

Neil Carberry, CBI managing director for people and infrastructure, said: "The Taylor Review rightly recognises that labour market flexibility is a key strength of the UK economy, driving better outcomes for everyone.

"Businesses agree that flexibility must be matched with fairness, but building on our current approach, as the report concludes, is the right way forwards. The CBI is ready to work in partnership with the government to address the challenges the report raises.

"Spreading good practice, not just focussing on new laws, is something the CBI has long supported given the link between good employee relations and higher productivity, which is the only sustainable route to rising wages and better living standards. There is much for firms to like, as well as some valid challenges, in the seven steps the Taylor team has outlined.

"A number of proposals in the report will be of significant concern to businesses, however. Changes to the application of the minimum wage, rewriting employment status tests and altering agency worker rules could have unintended consequences that are negative for individuals, as well as affecting firms' ability to create new jobs.

"The Government will need to consider these aspects extremely carefully, alongside proposals for any future tax changes, to ensure our labour market retains the flexibility and entrepreneurship that has made it the mainstay of the UK economy."

Picture: Pixabay

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