A lot can happen in a week or two, particularly when it comes to UK politics. Even with Brexit uncertainty continuing to dominate the headlines, there was still time for political mutiny on both sides of the fence, as eleven MPs in total quit the Labour Party and the Conservative Party to form the breakaway Independent Group.
The Independent Group is not a political party, not yet anyway. They do not have a leader, the structure nor the funding. But they will sit together as a group in the House of Commons and apparently share the same principles and values despite coming from different political backgrounds. Chuka Umunna, perhaps the most high profile defector, has also said the Group aims to form an official political party by the end of the year.
Until then, expect these MPs to make their stance on a number of key issues clear, including the tax system and their support of small businesses and the self-employed.
In its first statement, the Group said its “aim is to pursue policies that are evidence-based, not led by ideology, taking on a long-term perspective to the challenges of the 21st century in the national interest, rather than locked in the old politics of the 20th century in the parties’ interests.”
For contractors, who have felt the damaging effects of various UK Governments’ tax strategies, this will be somewhat refreshing to hear. Many independent workers have lost confidence in the current administration after the introduction of public sector IR35 reform and announcement of private sector changes, while most still haven’t forgiven the Labour Party for introducing the IR35 legislation back in 2000.
IR35 itself was enforced because the Government at the time believed contractors abused the tax system. Nearly two decades later and that same view is still arguably reflected in today’s policies, despite the fact the UK has a different political party at the helm and one that historically has been seen as the party for small business.
The potential for a new political party and one that forms policies better suited to the needs of small business and enterprise could be viewed, on the face of it, as an exciting prospect. Certainly, the Group’s pledge to “pursue policies that are evidence-based” will resonate with independent workers, whose lives are spent having to face the facts.
Contractors feel that a promise from HMRC to review the true impact of public sector IR35 reform before confirming private sector changes (which will be enforced from April 2020) was broken. There is no shortage of evidence to show that public sector reform has not increased IR35 compliance, despite the taxman’s insistence that it has.
From fears over the accuracy of CEST (HMRC’s IR35 tool) to blanket determinations made by engagers, initial reform might well have raised tax revenues, but there is limited data – if any – to demonstrate that a greater number of contractors are now correctly operating within the rules. But still, the Government pressed on and announced last November that private sector reform will go ahead.
So contractors feel let down, deceived and targeted not only by the current administration but by the one before that. Judging by Qdos research, which has shown in the past that 97% of independent workers do not believe the Government has their best interests at heart, there is an opportunity for any political party to win the support of the contractor workforce. As this way of working grows, these are voters worth attempting to win over.
Whether the Independent Group will have the initiative or understanding of the IR35 legislation to fight against further reform remains to be seen. And should it even decide to take the next step and form a political party, there isn’t much time.
Perhaps a more realistic hope is that these breakaway MPs recognise that contractors are vital to the UK economy and need genuine support, not empty pledges. It would be a smart move for the Independent Group, if and when it evolves into a party, to buck the recent political trend and devise policies that nurture this growing community of entrepreneurial individuals. Contractors’ annual economic contribution – thought to be somewhere between £125billion to £140billion – suggests it would be in the Group’s own interests to do so.
Its aim to “recognise the value of healthy debate, show tolerance towards different opinions and seek to reach across outdated divides and build consensus to tackle Britain’s problems” suggests this – for a change – is a group of politicians that could be open to new ideas.
Of course, only time will tell and we mustn’t get ahead of ourselves. First, the Independent Group must become a political party in its own right. If they achieve this then perhaps change is possible after all.