Contractors will play a major role in each of the three sectors to be prioritised as part of the government’s new industrial strategy. Does this mean that the pro-contractor growth agenda championed by the Department for Business, Innovation and Skills (BIS) will trump the Treasury and HMRC’s anti-contractor campaigns?
Are we likely to see the UKs flexible workforce of highly skilled knowledge workers – be they contractors, freelancers, interims, consultants or locums – finally gain the recognition and support it deserves?
Let’s hope so, because if contractors ever needed a break it’s now, what with HMRC’s business entity tests and IR35 compliance campaign launched in June, the off-payroll rules just kicking in, and the controlling persons legislation set to take effect next April.
And, as we’ve said before, the UK needs to grow and not tax its way out of this recession. An industrial strategy is an important step towards achieving the growth agenda; but it will only work if the left tax-gathering hand of government knows what the right growth-stimulating hand is doing. The tax inspector dogs need to be called off genuine contractors.
In fact, BIS should be courting contractors.
If you look at the research underpinning the government’s selection of the industrial sectors to champion, contractors are at the forefront of every niche:
- Advanced manufacturing: “The UK aerospace industry is the biggest in Europe and second largest in the world,” says BIS. Huge numbers of IT and engineering contractors can be found keeping the engines of virtually all of the major defence and aerospace organisations – both public and private – running at high speed
- Knowledge-intensive traded services: This sector includes the information economy, creative sectors, education and professional and business services; in other words, the sectors that consume by far the highest number of contractors and freelancers. According to BIS, this is “a large enabling sector also underpinning growth across a large part of the economy.”
- Enabling sectors: This is government-speak for energy and construction, including civil and infrastructure engineering. Those are two more industries with subsectors dominated by flexible knowledge workers, and which would grind to a halt if denied access to their contingent workforces.
Exactly how each of these sectors, and contractors, stand to benefit as a result of being central to the government’s industrial policy has not yet been fully explained. It seems we will have to wait until next year to see some tangible action plans.
However, the fact that such contractor-dominated sectors have been selected might just result in the support and recognition that the UK’s flexible workforce requires to unleash its full potential.