Companies in the gig economy are free-riding on the welfare state, says a new report by the Work and Pensions Committee. It calls for the government to close the loopholes that allow “bogus” self-employment practices.
In an inquiry that has had to be curtailed because of the election, the Committee heard from “gig economy” companies like Uber, Amazon, Hermes and Deliveroo, and from drivers who work with them. It says that the evidence taken painted starkly contrasting pictures of the effect and impact of “self-employment” by these companies.
“Companies in the gig economy are free-riding on the welfare state, avoiding all their responsibilities to profit from this bogus “self-employed” designation while ordinary tax-payers pick up the tab,” says Frank Field MP, Chair of the Committee.
The Committee says that the myth of self-employment is being used to deny workers the rights that come with “employee” or “worker” status. It points out that this frequently fails to stand up in court, but individuals face huge risks in challenging their employment status that way.
Therefore, says the Committee, the incoming Government should set out a roadmap for equalising employee and self-employed National Insurance.
Field says: “This inquiry has convinced me of the need to offer “worker” status to the drivers who work with those companies as the default option. This status would be a much fairer reflection of the work they undertake which seems to fall between what most of us would think of as “self-employed” or “employed”. It would also protect them from some of the appalling practices that have been reported to the Committee in this inquiry.”
To read the report in full, see here.