If Chancellor George Osborne is so keen to provide a flexible skills base for start-ups and enterprises in the UK, why doesn’t he do more to encourage contractors and freelancers? Like creating a fairer tax regime for contractors? Not stripping away employment rights in exchange for shares of dubious value.
Osborne’s plans to create ‘employees-lite’, who sacrifice employment rights in exchange for a tax-free share stake of up to £50,000 in the business for which they work, threaten to create a new underclass of workers: what the government is disingenuously calling the ‘owner-employee’.
Like so many policy initiatives that emerge from the coalition, this one provides an unwanted solution to a problem that does not really exist because there is already a solution. The policy’s only reason for existence is so it has the government’s stamp on it, and gives its leaders something to say in a policy landscape dangerously short on economic growth strategies.
The fact that the policy was announced during a party conference just as the IMF said it expects the UK economy to shrink by 0.4% this year, instead of grow by 0.2%, is unlikely to be coincidental.
If small businesses need access to a particular skill-set to help grow their business but are afraid of the red tape associated with employment, then they can already hire a contractor or freelancer. These are the enablers of entrepreneurship and already deliver small businesses an employment-rights-free, low risk, solution.
The value of shares in a small business are notoriously difficult to ascertain. Not only that, but any perceived value is difficult to realise in a typical ‘lifestyle business’ with an owner who has no great ambition to grow their firm.
So, Osborne is expecting workers to part with rights such as redundancy, unfair dismissal and certain maternity rights, not to mention possibly being paid a lower salary. And all in return for, potentially, nothing.
There is no ambiguity about the value of hiring contractors and freelancers. You get what you pay for from highly skilled knowledge workers who have chosen to work independently and not be employees. In exchange, contractors and freelancers can earn more and take greater control over their professional lives.
And they don’t have to put up with the false promises delivered by business owners and managers, which are likely to worsen the lot for employees if a new business decides to only hire ‘employees-lite’.
Genuine employees, with all they entail including employment rights, underpin virtually every organisation’s workforce. Employees deliver loyalty, longevity and a future to the organisations for which they work in exchange for those rights.
Contractors and freelancers serve a very important purpose, particularly to new and small businesses.
Why won’t the government acknowledge and support the brilliant flexible workforce of contractors and freelancers that it already has, rather than tinkering around the edges of employment and forcing many genuine employees into the unprofitable dead end of ‘owner-employeeship’?