Autumn Budget reactions
Jason Atkinson, managing director, Russam GMS reacts to the Autumn Statement, “The Chancellor revealed some good news for recruiters, jobs and small businesses in today’s Autumn Statement. He reported that 500,000 jobs were created this year, with 85% being full-time. This highlights a more buoyant labour market and clear signs that recovery continues. Unemployment is predicted to fall to 5.4% in 2015 indicating further recovery in the jobs market. Also, the economy is doing better than expected.
“At 3%, the UK’s growth figure is higher than 2.7% predicted in March and we also learnt that the UK has the fastest growing economy in the G7. Whist this is positive, as a global recruitment firm, with an increasing focus on international markets, we are concerned about how the UK competes on a truly global scale. We were pleased to see small businesses boosted with the Treasury pledging £400m to extend government-backed venture capital funds which invest in SMEs, called Enterprise Capital Funds. This is expected to provide up to £500m of new bank lending to SMEs.
“However, notably absent from the Autumn Statement were any measures to support the 5 million self-employed workers in the UK. On National Freelancer’s Day last month, Matthew Hancock, the minister for business, enterprise and energy said that the conservative party would focus on plans to create policies for its pre-election manifesto to make it easier for self-starters to prosper. On the same day, the Government appointed David Morris MP as first self-employed ambassador so we’re rather disappointed there was nothing in the statement to support the growing band of self-employed workers who contribute so much to the economy.”
Daniel Wise, joint CEO of Day Webster, said, “We were pleased to see a commitment to investing around £2bn in frontline capabilities in the NHS in 2015 - 2016 included in the Autumn Statement. This significant investment will help our NHS clients improve their services, the patient experience and ensure the right level of qualified medical staff is available to deliver the highest quality of care. Agency workers play a crucial part of delivering such services, offering much needed flexibility, round the clock support, expertise and value for money.”
Responding to the announcement that the Government will be consulting on the use of umbrella companies, Matthew Brown, managing director of giant group, commented, “We welcome the planned crackdown on non-compliant umbrella employers in the UK. The flexible workforce is an important contributor to the UK economy and so any measures that improve the working options of contractors across the country, and at the same time stamp out malpractice, can only be a good thing. At giant we offer an over-arching employment contract that ensures each contractor not only receives the statutory benefits that they are legally entitled to, but also remain compliant in terms of tax reporting and national insurance.”
“As a business that is committed to full and ongoing HMRC compliance and ensuring contractors have access to fair working opportunities, we continuously support any measures that ensure the flexible workforce has access to the relevant employment rights. We intend to participate in the discussion document due to be published by the Government to not only assist with this crackdown on non-compliance, but also guide any reforms to ensure they meet the needs of contractors.”
Julia Kermode, CEO of the Freelancer and Contractor Services Association, said, "FCSA welcomes the Chancellor’s promise to deal with those umbrella employers who facilitate the abuse of the employment rights of the UK’s flexible workforce. As a trade body, we have become increasingly concerned regarding recent media reports that unfairly tarnish our sector. Compliant umbrella businesses are important and valuable - it is not the umbrella "way of working" that it is wrong, it is the non-compliance of some umbrella employers that is wrong.
"FCSA’s members support hard-working freelancers and contractors who deserve to be recognised and celebrated as having an important role to play in the UK’s economic recovery and as the industry voice for umbrella employers who have taken regulation to new levels of professionalism over the last few years we have set ourselves apart from those businesses operating less than compliantly.
"We welcome the opportunity to share our expertise and experience with the Government to dispel some of the myths around umbrella employers, help improve standards and stamp out unethical practice in this sector. We are committed to ridding the industry of malpractice once and for all - allowing unethical behaviour to persist is unfair to contractors, recruiters and their clients as well as the service providers, our members, who behave compliantly and responsibly at all times.
"We know from our lobbying activities that Government and policymakers do not fully understand our sector or fully appreciate the economic value of our sector and we are currently undertaking a research programme that will establish the size and value of the professional umbrella employment sector and the number of freelance workers employed through it. We would be delighted to share the results with Government which I am confident will help steer their decisions so that future legislative changes will not be detrimental to our sector."
Samantha Hurley, head of external affairs & compliance at The Association of Professional Staffing Companies (APSCo), said, “We welcome the news that the United Kingdom is the fastest growing economy within the G7, and the fact that there has been an upturn in job creation as both obviously bode well for the professional recruitment sector.
"The Government must recognise that corporate agility provided by professional, flexible staffing has played its part in the UK’s economic success.
"APSCo has long campaigned for legislation to help maintain liquidity within the labour market and ensure greater recognition of the professional recruitment sector and those who work within it. Consequently,while it was encouraging to see that the Government recognises the value of self-employment and the & lsquo;ongoing structural change’ that is happening in the labour market, greater recognition now needs to be enshrined in policy to protect the professional contract marketplace.
"With regard to the Government’s announcement that it will stop tax relief from being claimed on expenses when they are paid with a salary sacrifice scheme, and its proposed review of the umbrella company employment model in order to crack down on those who abuse the system, APSCo supports any moves to remove abuse and provide a level-playing field. However, it is important that the Government does not lose sight of the fact that many of the umbrella companies operating in the professional recruitment sector are fully compliant, and provide an important link in the flexible recruitment supply chain.”
"Two further areas where a greater understanding of our sector is particularly pertinent are: in regard to proposed amendments to & lsquo;correct legislation underpinning the penalty regime for the late filing or non-submission of quarterly returns from employment intermediaries’ due to take effect from 6 April 2015, and tightening the “eligibility conditions for those claiming tax credits on the basis of self-employment.”
"Though changes to help guard against fraud must be acknowledged, the manner in which they are enacted is of critical importance. APSCo has called for improved opportunities for consultation with independent professionals and will continue to do so.“
Phil McDonald, MD of payroll company Paraplus, said, “In the great political balancing act that was the Chancellor’s Autumn Statement there was clearly something missing. The Office for Budget Responsibility reports the economy is growing, unemployment is falling and yet tax revenues are not growing as expected.
“ONS reported back in August self- employment is at a 40 year high (4.6 million people) with 15% of the total workforce describing themselves as self-employed. What is more, out of the 1.1 million people who have found employment since January 2008, 730,000 have been & lsquo;self-employed’, with a significant percentage of these being contractors working with recruitment agencies and/ or payroll umbrella companies.
“Yesterday’s Autumn Statement, made by George Osborne, highlighted plans for “consulting on other measures including the use of so called & lsquo;umbrella companies’” that were described to “deprive people of basic employment rights like the minimum wage and avoid tax.” This sweeping statement does a disservice to those umbrella companies who exist solely to provide a fair and ethical platform for the contingent workforce.
“Through the existing HMRC consultation process, Paraplus look forward to the outcome and hope it provides a clear and consistent framework that any contractor can understand. If contractors can understand the industry themselves then rogue operators will one day cease to exist.”