Taylor Review: UK Should End Cash in Hand Economy
The author of a government review into work practices would like to see an end to the “cash-in-hand economy”. Matthew Taylor, whose report is out on Tuesday, said cash jobs such as window cleaning and decorating were worth up to £6bn a year, much of it untaxed.
The review recommends that firms which have a “controlling and supervisory” relationship with workers should pay a range of benefits. That includes millions of pounds in National Insurance contributions. The recommendations are part of a much wider review into modern working practices, including the gig economy. Mr Taylor’s report recommends a new category of worker called a “dependent contractor”, who should be given extra protections by firms such as Uber and Deliveroo. It also says low-paid workers should not be “stuck” at the minimum living wage or face insecurity.
At the launch of the report later on Tuesday, the prime minister will say that it confronts issues that “go right to the heart of this government’s agenda and right to the heart of our values as a people”. Mrs May will say: “I am clear that this government will act to ensure that the interests of employees on traditional contracts, the self-employed and those people working in the ‘gig’ economy are all properly protected.”
In particular, Mr Taylor’s review found the UK had a “great record on creating jobs” but less so on the “quality” of those jobs. “In my view there is too much work particularly at the bottom end of the labour market that is not of a high enough quality,” Mr Taylor told the BBC. “There are too many people not having their rights fully respected. There are too many people at work who are treated like cogs in a machine rather than being human beings, and there are too many people who don’t see a route from their current job to progress and earn more and do better,” Mr Taylor said.
He said his aim was not to change the working landscape for those who wanted to work flexibly: “If people want to clock on and earn a few extra quid we don’t want to stop that. “We don’t want to ban zero hours [contracts] – many people who work zero hours want to do so.” But he said working platform providers such as Uber had to demonstrate that workers signing on for hours of work would “easily clear” the minimum wage.
Mr Taylor also said he did not want to ban cash payments outright, but hoped, over time, the increasing popularity of transaction platforms such as PayPal and Worldpay would see a shift from cash-in-hand work. “In a few years time as we move to a more cashless economy, self employed people would be paid cashlessly – like your window cleaner. At the same time they can pay taxes and save for their pension,” he said. “Most people who do pay for self-employed labour would like to know that that person is paying their taxes.”
However, Labour’s shadow business secretary Rebecca Long-Bailey said the review did not go far enough for the 4.5 million people in insecure work. She told the BBC’s Today programme: “If it looks like a job or it smells like a job then it is a job, and the worker should be employed, and I think in those those situations where a worker is carrying out work on behalf of an employer… they should not be exploited as a flexible workers.”
Trade unions also said Mr Taylor did not tackle many of the issues facing workers. TUC general secretary Frances O’Grady said: “From what we’ve seen, this review is not the game-changer needed to end insecurity and exploitation at work.” Tim Roache, GMB general secretary, called it a “disappointing missed opportunity”.
Mr Taylor, who worked on the review for nine months, is presenting seven recommendations to the government to provide “good quality work”.
The BBC understands he will also suggest ways to tackle tax avoidance from cash-in-hand work. He is set to call for cash jobs to be paid through platforms such as credit cards, contactless payments and PayPal.
Last year, tax dodging by people in the “hidden economy” cost the government £4.4bn, according to HMRC figures.
However, making changes to cash-in-hand work is a controversial area. In 2012 the then-Treasury minister David Gauke was criticised for saying it was “morally wrong” to pay tradesmen in cash.
Former shadow chancellor Ed Balls also came under fire for suggesting people should get a written receipt for all transactions, even small gardening jobs.