Andy Burnham’s immediate announcements from No 10 of a cap on most bus fares and an October 1st removal of VAT from domestic energy bills won’t cut it for the UK’s contractors — who need five things from the new PM.
In particular, the contractor workforce needs business confidence restored, action on IR35, action on employment status, Security Clearance reform, and then a stability period, writes Joshua Toovey, head of policy and research at the Association of Independent Professionals and the Self-Employed (IPSE).
- Business Confidence Restored: a reversal to employer NICs would probably be the most immediate way to lift employer and business confidence.
- Tackle IR35: the employment and tax bugbear of the contractor sector shouldn’t be ignored by Burnham if he believes what critics call ‘zero-rights employment’ is wrong
- Action on Employment Status: Ministers promised an employment status review before 2026, but it’s still not here, despite a June 30th vow to publish it in due course
- Security Clearance Reform: The ‘Catch 22’ of Security Clearance continues to frustrate contractors trying to get work, and frustrate public hirers trying to get skills
- Provide Certainty: Once Burnham announces this quartet, freelancers, contractors and the self-employed need continuity, no tax tinkering, and business-as-usual.
Political capital, public patience — and a fast-running clock
Political capital used to last. A big election win used to buy a government years of room to govern, reshape policy and see through difficult decisions. Today, however, a landslide barely survives a parliament. Sir Keir Starmer is the starkest example yet. A 174-seat mandate wasn't enough to protect him from his own MPs, and an electorate, that now judges prime ministers in months, not years. Andy Burnham arrived in 10 Downing Street on July 20th knowing exactly how quickly that clock runs down.
What has Andy Burnham done so far, and said?
Aside from the bus fare cap announcement (July 22nd), and the VAT energy bill pledge (July 21st), Burnham has talked of a genuinely business-friendly approach to growth.
He’s spoken of backing enterprise and pairing it with public investment rather than piling on more barriers to hiring.
Who has Burnham appointed?
Burnham has appointed John Healey — a former TUC campaigns director and defence secretary under Starmer — as chancellor of the exchequer.
And he’s promoted Kanishka Narayan from junior AI minister to a new Cabinet-level AI role, seemingly with the UK’s AI sovereignty in mind.
Why has Burnham scrapped DSIT — and what does it mean for tech contractors?
In the same week Narayan was promoted, the Department for Science, Innovation and Technology (DSIT) confirmed on X that, following a “Machinery of Government change,” its responsibilities had transferred to the business department.
In short, the UK government’s technology department is no more.
The closure went ahead despite the UK’s technology trade body, techUK, writing to Burnham urging him not to scrap the department.
Elevating one AI minister to Cabinet-level status while dissolving the department built around the rest of the tech brief is, at the very least, a curious pairing of signals for an IT contracting workforce Burnham has yet to convince of his “tech credentials.”
What will contractors judge Burnham on?
For the UK's 4.4 million self-employed people, and even contractors in IT, the real test won’t be the headlines of Andy Burnham’s first week, however.
It's what changes in the first 100 days, while the new PM still has the political capital, and the public’s patience, to spend on it — and contractors will be rooting for these five:
- Business Confidence Restored
The past year has tested contractors' patience more than most. The rise in Employer's National Insurance has prompted many businesses to pause projects, reduce contractor engagements or scale back their use of flexible talent altogether. Business confidence has weakened, investment decisions have been delayed and economic growth has remained stubbornly flat.
Therefore, it’s auspicious that Andy Burnham has positioned himself against the April 6th 2025 increase in employer NICs. But that positioning, made in a BBC Newsnight interview on June 5th 2026, hasn’t yet materialised into anything more.
- Tackle IR35
IR35 continues to distort the UK’s labour market. Rather than tackling tax avoidance, the off-payroll rules have encouraged widespread risk aversion from clients. That means contractors continue to remain locked out of opportunities, while businesses struggle to access the expertise they need to innovate and grow. Despite a Treasury minister when Sir Keir was PM ruling out a relook at IR35, we’ll be pressing Burnham and Healey to break with that stance.
- Action on employment status
The government must also bring forward its long-promised consultation on employment status, which was promised by ministers before the end of last year but has yet to materialise.
Greater clarity on employment status is essential if businesses and the self-employed are to have confidence in the rules governing modern working relationships. Without it, the uncertainty that has fuelled many of the problems associated with IR35 will persist. Publishing the employment status review should be an early priority for the new government.
[Editor’s Note: ContractorUK understands that Labour’s Employment Status Review is drafted, but has been held back from publication. Described by a civil servant who was present at the FCSA’s July 8th Forum as a “wide-ranging” document with “no one perfect answer,” the employment status review may have been held back because of the Starmer-Burnham transition.]
- Security Clearance reform
Another area where the government could make an immediate difference to contractors, UK hiring and the public sector is security clearance. Contractors continue to report being excluded from roles because the personnel behind the roles (or the advertised roles themselves) insist that applicants must hold security clearance before they can even apply. Known as the ‘Catch 22’ of Security Clearance (SC), the position that you must have SC to apply for a role (even though you need a role in contention to obtain SC) is at odds with long-standing Cabinet Office guidance. Developed with IPSE, the guidance makes clear that existing SC should not be a pre-condition for application, but we hear it’s being flouted.
Rather than remaining as ‘best-practice,’ the Cabinet Office SC guidance should become mandatory across government and the wider public sector. Mandating the guidance would remove an unnecessary barrier to skilled professionals working on critical national projects.
As we have previously told ContractorUK readers, long security clearance turnaround times are already creating unnecessary delays and skills shortages for the public sector. Making the existing guidance enforceable would be a practical reform that costs little, but would have a meaningful, positive impact on contractors and taxpayer-funded organisations.
- Provide certainty
More broadly, contractors need stability. Over the past decade, governments of every colour have repeatedly tinkered with the tax system, introducing new rules, changing thresholds and layering on additional complexity.
For the UK's smallest businesses, that constant uncertainty makes it harder to plan ahead.
A genuinely business-friendly government should resist the temptation to keep pulling different tax levers and instead provide a stable, predictable framework that gives the self-employed the confidence to run their businesses.
What is IPSE doing about it?
At IPSE, we're already writing to ministers across the Andy Burnham-led Labour government to ensure the voice of the self-employed is heard from the very first policy talks. Our association will also continue to use its positions on the Small Business Growth Forum and the Small Business Regulatory Taskforce to press for urgent action in these areas.
If Britain’s new prime minister wants his first 100 days to demonstrate that his commitment to a business-friendly economy is more than rhetoric, there are practical reforms he can deliver immediately. These five from Labour under Andy Burnham’s leadership would also send a powerful signal that this government recognises the contribution that the self-employed make to the UK's economy.
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