Umbrella waterside

Government Labour Market Strategy “Too Little Too Late”

Some 12 months after it was written, the long-awaited Labour Market Enforcement Strategy 2022/23 has finally been published – almost at the end of the period it is meant to cover!  The strategy outlines the government’s plan to ensure legislation keeps pace with the evolving employment landscape.

Within this, Margaret Beels OBE Director of Labour Market Enforcement Strategy reaffirmed the government’s promise to regulate the umbrella industry, along with introducing the Single Enforcement Body (SEB), the latter of which Grant Shapps recently said would be shelved.

The document states:

“HMRC estimates put the number of individuals working through umbrella companies at 100,000 in 2007/08, rising to 500,000 in 2020/21, and the early indications are that IR35 changes may have accelerated this growth.”

“The Government has committed to regulating umbrella companies which will be a welcome step towards achieving compliance provided EAS receives the necessary budget to enforce the regulation. Taking into consideration the outcomes of the current consultation, I will work closely with the relevant departments to seek to root out non-compliance in this area.”

It is positive that this document has finally been published, and it is good to see the government restating their commitment to regulate the umbrella sector.  However we can’t help thinking that this is too little too late for many thousands of workers who have been exploited by dubious umbrellas since their regulation was first mooted in 2017.

Today’s publication and its promises don’t gloss over the fact that it’s nearly the end of the period the strategy covers.  The delay in publishing isn’t Margaret Beels’ fault. She has done everything possible to stick with her timeframe but hasn’t been helped by the political chaos.

IWORK, along with many other stakeholders, invested time in this process by contributing to the consultation, submitting a written response, and attending meetings to have our say.  However it’s very disappointing that the government has deprioritised dealing with problems in the labour market, whilst many people continue to be exploited.  Westminster has been talking about regulating the umbrella sector for years and made no visible progress.  They just need to get on with it!

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