Taylor report is a step in the right direction but will Westminster stand up to unscrupulous employers?
Business for Scotland CEO Gordon MacIntyre-Kemp said today that the Taylor Report is a step in the right direction, but warned there needs to be protection and support for the self-employed and young people from unscrupulous employers in the “Deliveroo economy”.
“Zero hours contracts can offer some self employed people the flexibility they require but companies such as Deliveroo are using them to exploit (mostly) young people and avoid paying their fair share of employers National Insurance obligations. That isn’t an economic model, it’s just legal tax and employer responsibility evasion.
“Real jobs don’t exist in what you might call the Deliveroo Economy. Sometimes people have two or three jobs, all without guaranteed income, hours, pensions, training, advancement or hope of ever owning houses, and so we have the ridiculous situation where extremely hard-working people are dependent on housing benefit and child tax credits.
“In Scotland the average wage for young people 18-24 is likely to be less than £11,000 full time and they can’t expect to hit the national average for income until they are well past 30; that just doesn’t work as our entire economic system requires young people to be economically active and generate income tax and NICs at a level that pays for pensions.
“Low income and high personal debt is becoming a real problem for 32% of 18 to 24 year olds, who account for 21% of the UK’s over-indebted people but only make up 9% of the population, whereas the pensioners their taxes need to pay for make up 18% of the population.
“Remember this report’s recommendations will need to be implemented by the Conservative government that tried to justify bringing National Insurance Contributions (NICs) for the self-employed into line with employed people. The idea is that with more people being self-employed less revenue is collected, which is true, but self-employed people take far higher risks than employed people and are most at risk from economic downturns, not to mention that more experienced people leaving paid employment opens up opportunities for younger people.
“Raising NICs for the self-employed to 10 per cent in 2018 and 11 per cent in 2019 would have made starting up a self employed business much less attractive and we want the UK government to ensure that there will be no tax hike on the self-employed which would be bad for entrepreneurs and bad for the economy.”
BfS members have backed the living wage campaign and support economic growth through higher levels of economic inclusion and fairer sharing of the nation’s prosperity.