Source · Select Committees · Business and Trade Committee
Recommendation 20
20
Rejected
Paragraph: 127
Set out Government plans for statutory protection against unscrupulous umbrella company practices
Recommendation
The actions of unscrupulous umbrella companies are depriving workers of rights and in some cases remuneration, and they are damaging the reputation of umbrella companies as a whole. There is widespread agreement that the Government should act to provide statutory protection from such practices. In response to this Report, the Government should set out its plans for doing so, or should explain what obstacles are preventing it from doing so.
Government response summary AI-generated
The government rejects the committee's characterisation of enforcement, stating it does not agree and detailing existing HMRC minimum wage investigations and increased investment in enforcement bodies, arguing that the UK already has a robust system for enforcing employment rights.
Summary of the government's response below — read the verbatim text to verify.
Paragraph Reference:
127
Government Response
Rejected
HM Government · verbatim extract
Rejected
currently defined in law and are generally unregulated, unless their other activities bring them in scope of the existing legislation that applies specifically to employment agencies and employment businesses. The Government is committed to increasing transparency and protection for agency workers, including those employed by an umbrella company. It therefore carried out a Call for Evidence on the umbrella company market between November 2021 and February 2022 to gather evidence to inform development of potential policy responses. The Financial Secretary to the Treasury issued a written ministerial statement on Tax Administration and Maintenance (TAM) Day on 27 April 2023 setting out that the Government would shortly publish a summary of responses to the 2021 Call for Evidence alongside a policy consultation on options to regulate umbrella companies and to tackle non-compliance in the umbrella company market. The full statement is available here- https://questions-statements.parliament.uk/written-statements/detail/2023–04–27/ hcws749. On 6 June 2023, the government published the response to the Call for Evidence and the policy consultation. They are both available on gov.uk at the following links: https:// www.gov.uk/government/consultations/call-for-evidence-umbrella-company-market and https://www.gov.uk/government/consultations/tackling-non-compliance-in-the- umbrella-company-market. Minister Hollinrake also wrote to the chair of the Business and Trade Committee to draw their attention to the consultation given the parliamentary interest in this topic. 16 Post-pandemic economic growth: UK labour markets: Government Response The consultation (which will remain open until 29 August) proposes options to regulate umbrella companies and tackle tax non-compliance. The options put forward aim to address the issues that workers reported (including through the Call for Evidence), ensure a level playing field by making sure competition in the market is genuine and protect taxpayers and the exchequer.
Read the full response on Parliament ↗