Opportunities and obstacles: the Taylor Review 2017

Opportunities and obstacles: the Taylor Review 2017

The Prime Minister commissioned the head of the RSA to investigate how to end gig economy confusion. Did he succeed?

Ever since it was first announced back in October last year, few things have stirred more anticipation – and indeed anxiety – in the freelance and selfemployed community than the Taylor Review. Commissioned by Theresa May and headed up by Tony Blair’s former head of policy Matthew Taylor, the Review set out to ‘look at how employment practices need to change to keep pace with modern business models.’ 

Matthew Taylor

Beginning on 30 November 2016, the Taylor Review consisted of a detailed government research project to ‘reveal the scale of “gig” working and the reasons people take it up’, as well as a regional tour exploring different sectors of the economy and labour force. The Review also accepted submissions from leading industry bodies like IPSE. 

From the outset, IPSE has welcomed the commissioning of the Taylor Review. Almost since its very foundation, IPSE has been about not just overturning the damaging IR35 regulation, but also getting the government

to bring its legislation in line with modern employment practices and ensuring the self-employed are recognised for their vital contribution to the economy. 

That was reflected both in IPSE’s hearing with the Taylor Review panel and in its official submission to the Review, which called for a statutory definition of self-employment, ‘to end confusion and ensure working for yourself is viewed as a positive, valuable way of working’. It also called for more support to help the selfemployed with training and saving for retirement, as well as changes to the welfare system to ‘better support the self-employed, particularly relating to issues of Universal Credit and maternity and paternity provisions’.  

So, what was the Taylor Review’s response? Well, it called for ‘seven steps towards fair and decent work’: 

1. The government should ensure that ‘the same basic principles apply to all forms of employment in the British economy’, which means making ‘the taxation of labour more consistent across employment forms’. 

2. Although the positive opportunities created by ‘platform-based working’ must be protected, the government should also ensure ‘fairness for those who work through these platforms’. One way to do this is by taking steps to be clarify ‘how to distinguish workers from those who are legitimately self-employed.’ 

3. The government should take steps to improve conditions for workers – or ‘dependent contractors’, as the report recommends they should now be named. It should ‘provide additional protections for this group and stronger incentives for firms to treat them fairly’.   

4. More should be done to ensure companies are transparent and open ‘about their practices and that all workers are able to be engaged and heard.’ 

5. The government should work to ensure everyone has ‘realistically attainable ways to strengthen their future work prospects’. 

6. There must be a ‘more proactive approach to workplace health’. 

7. The National Living Wage is a ‘powerful tool to raise the financial base line of low paid workers’, and it should be accompanied by ‘sectoral strategies engaging employers, employees and stakeholders to ensure that people – particularly in low paid sectors – are not stuck at the living wage minimum or facing insecurity’. 

IPSE welcomes the Review’s commitment to protecting the flexibility and positive opportunities created by ‘platform-based working’, but there are some doubts about redefining workers as ‘dependent contractors’. As IPSE’s chief executive Chris Bryce has said, ‘any changes to employment status should bring clarity and not add to the confusion. Renaming workers “dependent contractors” might bring some benefits, but government will have to be absolutely clear who falls into this group.’ 

IPSE believes that this new ‘dependent contractor’ status may just be adding to the confusion pervading the gig economy. As Bryce went on to say in IPSE’s official response to the Taylor Review, IPSE still believes that the best way to clear the confusion in the gig economy is to ‘enshrine what it means to be self-employed in law’. A statutory definition of self-employment would not only protect the flexibility of legitimately self-employed people, but also stop unscrupulous companies using the confusion to exploit the vulnerable self-employed. 

IPSE also has ‘a serious concern’ about how the Review defines these ‘dependent contractors’. It believes the Taylor Review is ‘far too reductive’ because it only seems to use ‘direction and control’ as indicators of worker – or ‘dependent contractor’ – status. ‘In reality, things are a lot more complicated than that. You should also consider the ability to choose when and where you work, whether the role is project based and whether you have the right to send a substitute.’ 

There are certainly positives to take from the Review too, however. For example, as Chris Bryce noted in IPSE’s response, ‘Mr Taylor’s recommendation to align tax and employment status would be a clearly positive step, as this is an issue that currently causes a great deal of confusion.’ 

IPSE also shares the report’s concern that not enough self-employed people are saving for their retirement or insuring against illness, and strongly supports its recommendation that the government should investigate ways to resolve this. There was also little to disagree with in the report’s calls for a ‘more proactive approach to workplace health’ and greater business transparency. 

So, overall there are many positives for independent professionals and the self-employed to take from the Taylor Review, as well as the risk for some negatives. But what will be carried through – what will the government write into law now? Well, the short answer may be not much. 

Having lost her majority in Parliament, May’s premiership is likely to be humbled and cautious from here on in. Despite pledging in her Taylor Review launch speech to thoroughly consider the report’s recommendations over the summer, it’s unlikely she will attempt any remotely controversial domestic reforms – particularly while Brexit is under way. If new legislation does emerge from the Review, however, IPSE’s response is ready.