Labour under fire for anti-contracting stance

Labour’s John McDonnell has been hit by the business community for failing to say enough in his party conference speech to champion entrepreneurs, and risk-takers like contractors.

The shadow chancellor gave “absolutely no recognition of the directors” of companies and entrepreneurs “whose skills and endeavours generate jobs and prosperity”, accused the IoD.

Mr McDonnell also drew criticism earlier this month, when he used a speech to the TUC to reiterate his pledge that a Jeremy Corbyn-led government would ban all umbrella companies.

Status experts Qdos, contractor body IPSE and trade group the FCSA were among those who attacked the pledge -- and perhaps successfully, as it was not repeated to Monday's conference.

'Age of insecurity'

The closest Mr McDonnell came was an allusion to the environment that he has previously implied that umbrellas, and other forms of atypical work like the 'gig economy,' have created.

Speaking in Liverpool on Monday, the shadow chancellor said: “The Tories have created an age of insecurity where people have little if any power or control over their lives.”

It aligns with what Mr McDonnell told the TUC -- that ‘working several jobs doesn’t mean you should suddenly lose one’, and that ‘freedom doesn’t mean foregoing basic rights.’

“We will extend full rights to all workers, so that includes so-called ‘Limb-B’ workers, entitling everyone in insecure work to sick pay, maternity rights and the right against unfair dismissal.”

'We will ban brollies'

He also told the union on September 11th: “[We] will clamp down on the bogus self-employment that we have seen develop and, yes, we will ban the payroll companies, the umbrella companies, that have been developed in recent years.” 

Julia Kermode, chief executive of the FCSA said that Mr McDonnell clearly did not understand umbrellas, which provide full employment rights or else are not genuine brollies.

Chris Bryce, CEO of IPSE believes a brolly ban would “drive a stake through the heart of… flexibility”, and said conflating bogus self-employment with gig working was “a mistake”.

And Qdos’ Seb Maley, a former tax inspector agrees. “Labour must be careful not to assume all self-employed workers want employment rights.

“Contractors for example, by and large are happy working without these when operating outside IR35,” he said.

'Dividends and fair share'

Another area contractors will be on guard against is Mr McDonnell’s pledge -- made on Monday to his Labour colleagues -- that the party will be “ending the profiteering in dividends”.

Although seemingly confined to public sector governance, the anti-dividend pledge is alongside commitments from Labour on more general areas of taxation, and avoidance.

“There are millions of businesses out there which deserve our respect and we will always support them. They are responsible, ethical entrepreneurs, who pay their taxes and support our community. They should know that we are proud of them.”

Mr McDonnell also announced: “[But] we’ll be demanding companies sign up to the Fair Tax Mark standards, demonstrating transparently that they pay their fair share of taxes. So fair warning to the tax avoiders, we are coming for you.”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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