Resolution Foundation sets out its NMW proposal

Think tank Resolution Foundation has suggested that a minimum wage be put in place for workers currently classified as “self-employed” who do not control what prices are set for their services.

One in five of the UK’s 4.8m self-employed are earning less than two-thirds of the typical weekly wage of about £500, the think tank said at a discussion on Tuesday [4 July] about the proposal. Of that number, about half earn less than the £310 per week low pay threshold.   

The focus is on workers such as courier service providers, hairdressers and taxi drivers, primarily for those workers “who take work from firms or platforms” and don’t have control over the price they charge.

However, a minimum wage is “not appropriate for the majority of self-employment”, the think tank said.

Lord Adair Turner, chairman of the Institute for New Economic Thinking and former chair of the UK Financial Services Authority, has endorsed the recommendation. 

However, Jason Moyer-Lee of the Independent Workers Union of Great Britain, was less enthusiastic, calling the recommendation “fundamentally flawed”. Moyer-Lee said existing laws around the application of minimum wage should be enforced.

Fellow panelist Adele Aspden of law firm Eversheds Sutherland pointed out that challenging ambiguities may exist around price controls at the most basic level of self-employment. For instance, a self-employed window cleaner may offer a service at one price, which a potential client then negotiates down to a lower fee. What then is the criteria for ‘price setter?’, Aspden asked.

The recommendation has been given to Matthew Taylor, who is heading a study of how the UK is dealing with the modern workplace. The release of Taylor’s report is anticipated this month.

Recommendations to support the self-employed:

  • Extending Statutory Maternity Pay at a cost of up to £82m and Statutory Paternity Pay at a cost of up to £18m
  • Extending contributory Jobseekers’ Allowance to those who have paid Class 4 National Insurance Contributions (NICs) at a profit level of £25k for two years, at a cost of around £50m
  • Reopening plans to equalise NICs up to the 12% rate that employees pay, saving £1bn
  • Extending employer NICs to price-setting firms that take on self-employed contractors, possibly through a new levy
  • Reducing the tax advantages associated with self-incorporation by scaling back Entrepreneur’s Relief and the Annual Exempt Amount, which together cost £6bn.

• Want to comment on this story? Email us at [email protected] or tweet us below to tell us your thoughts. We will run comments online in a round-up at the end of the week.

Email story to a friend

MET Recruitment invests £300k into new hub in Dudley

MET Recruitment has invested more than £300k into launching a dedicated hub in Dudley, in the West Midlands.

New to Market 26 January 2022

Airlines and hospitality sectors launch recruitment drives

Airbus, Bournemouth Airport and Parkdean Resorts are all on the hunt for new talent at the start of the year.

25 January 2022

NEW TO THE MARKET: 4-7 JANUARY 2022

This week’s new launches include: BAE Systems

New to Market 5 January 2022

APPOINTMENTS: 13-17 DECEMBER 2021

This week’s appointments include: Astute Technical Recruitment, Coleman James, Dedicate Recruitment, Petroplan

People 17 December 2021
Top