The Labour Party’s John McDonnell has been severely criticised by various business agencies for his stance against the independent professionals and the self-employed. The Minister has been criticised for not doing enough to protect the rights of contracting professionals.

The shadow chancellor of Exchequer has also been criticised by the Institute of Directors (IoD) for failing to recognise the contributions of directors whose skills and efforts have contributed to increased employment and prosperity in the UK. He had also received criticism for his statement made during a speech to the Trades Union Congress (TUC) that he would ban all umbrella organisations.

Business agencies that have vehemently criticised the stance of the Labour Party MP against the UK Labour include employment status experts Qdos, the trade group Freelancer and Contractor Services Association (FCSA), and the contractor body Association of Independent Professionals and the Self-Employed (IPSE).

Spreading Rumours and Untruths

The shadow chancellor has been an outspoken critic of the gig economy and umbrella companies. While speaking in Liverpool in a conference this Monday, he stated that the Tories had created an age of insecurity. This statement aligns with his statement to the TUC where he had said that freedom does not mean forgoing rights or working multiple jobs does not mean you should lose one.

Mr. McDonnell also has pledged that his party will end the “profiteering in dividends”. The anti-dividend pledge is in addition to the commitment of the Labour party on taxation matters.

He has also stated in a speech given to the trade union about two weeks ago that he will clamp down on bogus self-employment and put a ban on umbrella companies and payroll companies.

According to the chief executive of the FCSA, Mr. McDonnell does not understand the role of umbrella companies. The companies are not ‘genuine brollies’ but rather provide full employment rights.

Also, the CEO of IPSE, Chris Bryce, had stated that he believes that a brolly ban would be like driving a stake through the heart of flexibility. He had said that equating self-employment with gig-work is a mistake.

Seb Maley, the former tax inspector at Qdos, also agrees that the Labour party should be careful in assuming that all self-employed workers would want rights similar to regular employees. In contrast, most of them are happy operating outside the IR35 without these rights.

The contractors and contracting agencies such as umbrella companies should be appreciated and encouraged rather than opposed. They play an important role in contributing to the reduction of unemployment and boosting the economy. In this context, the criticism from the Labour party against them is unfounded and groundless.