Jonathan Reynolds, the business secretary, has pledged to close “bogus self-employment loopholes” that he said deny workers basic rights, telling Labour’s party conference today that the change would give up to 100,000 more workers access to the national living wage and holiday pay.
Reynolds told delegates it was an issue “which both workers and businesses raise with me repeatedly”. He said loopholes in employment law were “being used to define workers as self-employed when they are clearly not, denying basic employment rights, undercutting businesses who are doing the right thing and leaving people with the sense that playing by the rules doesn’t pay”.
“Everyone can see this isn’t right. It is a fundamental question of fairness. This Labour government will put an end to it. We will close the loophole. We will level the playing field for business,” he said.
Where the line falls between employment and self-employment has been tested repeatedly in the courts. In May, a tribunal ruled in a case that began in 2018 that football referees engaged by PGMOL were self-employed, denying HMRC £584,000 in employment taxes it had argued were owed.
Industrial “renaissance”
Reynolds also promised a “renaissance” of British industry across the country, saying Labour would ensure that ideas developed at home were also built and developed in Britain.
He told the conference that “reindustrialisation isn’t nostalgia”, arguing that future industries depended on “infrastructure and physical production” as well as ideas.
“I refuse to let Britain be a country that generates the great ideas, only for other countries to build and scale them,” he said.
Reynolds acknowledged the “challenges” facing British businesses but said Labour’s approach was to provide “answers” rather than “lashing out with anger”. “We don’t bury our head in the sand, we tackle the big issues head on,” he said, adding that this applied in particular to industries he accused the previous Conservative government of leaving “to squander”.
Business groups respond to Healey
Business groups also responded to the conference speech by John Healey, the chancellor, which came a month before his first Budget on 28 October.
Shevaun Haviland, director general of the British Chambers of Commerce, said: “This was a significant speech. The Chancellor clearly recognised the importance of business in creating the UK’s wealth and that cutting their costs is key to achieving that.”
She said his pledge to use public procurement to back British capability showed he understood its importance in driving regional growth, but that smaller firms “must be able to compete for contracts on a level playing field”.
“The test now is whether new projects, such as the £6bn for British shipyards, are delivered quickly, with clear pipelines that give businesses the confidence to invest in people and capacity,” she said.
Haviland said the strategy was “unlikely to succeed while the everyday cost of doing business is still soaring”, pointing to rising costs from employment, energy and business rates. “For a typical SME their policy related operating costs have increased by more than 70 per cent in 10 years,” she said, adding that the Budget “must give them breathing space, avoid any further tax rises and cut some of these costs”.
She said Healey should cut employer national insurance contributions for under-25s, and consider cutting the Renewables Obligation by 75 per cent and lowering business rates multipliers to reduce costs for firms. The measures echo the BCC’s Budget submission to the chancellor earlier this month, while the CBI has separately urged Healey to cut business costs ahead of the Budget.
Haviland said the chancellor had “rightly called out the deplorable situation where we have almost one million young people not in employment”, and that the expansion of apprenticeships “will only be successful if the voice of business is heard”. She also said he “should apply a growth delivery test to all of his budget decisions”.
Michelle Ovens, founder and chief executive of Small Business Britain, said it was “encouraging to hear the Chancellor’s focus on hope, local growth and creating opportunities for young people”.
She said small businesses were “integral to supply chains across the UK” and that the organisation looked forward “to seeing how investment in areas such as shipbuilding will create opportunities for SMEs and support local growth”.
