Jessica Fino 2 Jun 2017 04:55pm

Next government to fight “fake” self-employment

The three main political parties in the UK have committed to tackling the issue and have vowed to protect the 4.8 million self-employed workers in the UK if they win next week's election

In a small business general election debate on Friday, Mike Cherry, chairman of the Federal Small Businesses (FSB), questioned members of the Labour, Conservative and Liberal Democrat parties about how they would protect workers and single them out from further tax increases.

Baroness Kramer from the Liberal Democrats said, “I think that if you’re self-employed you take great risks, and that needs to be reflected in the way we tax people.

“Artificial intelligence and robotics are changing the whole structure of employment. What concerns me is that we are trying to cope with issues like Brexit but actually this should be our number one priority in our agenda.”

Kramer said that changes in technology and the Internet are "coming very quickly and completely changing the job market".

John McDonnell, shadow chancellor, told the audience, “Small businesses are largely driven by self-employed people so we have got to protect them.”

He said that Labour would not increase National Insurance or VAT on such workers, but pledged he would make sure the self-employed are genuinely self-employed. He would create a proper legal definition of self-employment in a bid to squeeze out bogus self-employment, which results in exploitation.

David Gauke, chief secretary to the Treasury, said that the government supports the self-employed entrepreneurial economy.

He pointed out that Matthew Taylor is carrying out a review into the changing jobs market, and that the government would use his recommendations to create the right balance between encouraging self-employed people and preventing exploitation.

The hustings debate, organised by the FSB and the Association of Convenience Stores (ACS), also covered subjects like Brexit and taxes.

Talking about tax fairness, Kramer criticised the current business rates and their impact on SMEs, calling the system something out of "the Victorian era”.

Despite being criticised by McDonnell over delays in relief applications, Gauke said that there was “an unprecedented” £430m package of reliefs available for businesses.

James Lowman, ACS chief executive, said, “It is clear from the discussions at the event today that business rates remain a top priority issue for local shops and other small businesses.

“All of the major parties have committed to taking action on rates, and we will continue to campaign to ensure that whoever takes office after the election, the rates system is reformed to be fair to all types of businesses.”

Talking about Brexit, Gauke said that securing a fair deal was the biggest challenge the next government would face, with Theresa May being the only competent leader to deal with the negotiations.

But McDonnell fought back by arguing that May’s decision to leave the single market membership would only hurt jobs in the UK, and said a change of tone was needed.

He said that the best deal would be a collaborative one, and that would only be achieved by mutual interest and respect with the EU, not with threats that "no deal is better than a bad deal".

Kramer said, “Exports with the single market used to be so easy, and now that is gone because May decided to leave the single market. SMEs will be the most affected.”

She also asked the audience if they thought that EU citizens would go through a hostile visa system to come and work in the UK or instead choose to go to cities such as Berlin or Paris.

The Lib Dem spokesperson ended her remarks by saying that, if elected, her party would hold a referendum on the final deal, as the final decision on Brexit should be made by the public and not by one prime minister.