Labour pledges to halt IR35 private sector reform

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The Association of Independent and the Self-Employed (IPSE) hustings was left overjoyed on Monday night after Labour vowed to scrap IR35’s expansion into the private sector.

Labour MP Bill Esterson told the contractor group’s event that the party would abandon the planned April 2020 reform to the off-payroll working legislation, which has already led to firms like Royal London and Northern Trust banning limited company contractors.

Mr Esterson said: “We absolutely can’t see it rolled out into the private sector the way things are at the moment.”

The pledge follows the Liberal Democrats outlining in their manifesto that a Jo Swinson-led government would “review recent proposals to change the IR35 rules.”

IPSE’s Simon McVicker praised both parties’ stances, saying: “The pledge to halt the changes will be very welcome to freelancers … The review would give IPSE the chance to clearly show the damage these changes would do and stop them once and for all.”

Additionally, Mr Esterson said that Labour would also review IR35 rules in the public sector, stating the legislation had caused “real problems for self-employed professionals who need to get contracts.” He continued: “We are seeing a reduction in the availability of skilled workers in the health service and elsewhere as a result … There needs to be a fundamental review.”

Contrastingly, the lack of a similar manifesto pledge from the Conservatives resulted in criticism, with Chris Bryce, the CEO of IPSE, saying: “We finally see … that the Conservative Party – the party of business – are the only major party which would keep IR35 [as it is.]”

Mr Bryce called on the Tories to “reconsider before 12/12 and remove this unnecessary, unfair and unworkable blight on the UK’s agile workforce and unleash them to fully contribute to UK plc.”

Mr McVicker, echoed this statement, even suggesting that the Conservatives’ position could damage their general election chances: “…freelancers and the self-employed represent five million votes up for grabs. Now both Labour and the Liberal Democrats have heeded IPSE and the freelance community on IR35, it’s time for the Conservatives to take note too.”

Matt Smith, managing director of Harvey Nash, also believes IR35 will play a big part in the election, saying: “With the potential impact of IR35 on [contractors’] livelihoods … it will be a major factor in voting decision[s] in December”

“If the political parties are serious about affecting real change after the election and driving new growth post-Brexit, then the planned changes in policy in relation to self-employment … will need to change.”

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