A SENIOR politician has accused the Government of misunderstanding how the world of work has changed as Parliament heard calls for a strategic review of the legislation affecting contractors.
MPs pressed the case for a review of all types of employment, including flexible working, at the Committee Stage of the Finance Bill this week.
Roger Mullin and Kirsty Blackman from the SNP led the push after fears grew their constituents in Scotland would be particularly badly affected by recent changes to travel and subsistence relief.
The SNP tabled an amendment for a review to be written into law after meetings with trade body PRISM.
Mr Mullin, the SNP's Treasury spokesman, told Financial Secretary to the Treasury David Gauke the Government misunderstands the world of work and how it has changed.
He told the Commons last night (Monday): "I suspect that part of the problem is that the Government have misunderstood the needs of the modern labour market".
"People are no longer employed either in traditional ways or entirely self-employed in the way it is traditionally understood."
The Government has so far rejected the review plan. The amendment, which resulted in the review being voted down, was largely symbolic because the Finance Bill is a Government bill that would be expected to attract overwhelming support.
The Government has largely removed the ability of contractors to claim travel and subsistence relief, claiming it was unfair to those permanent employees doing the same job.
PRISM chief executive Crawford Temple said the fight goes on.
He said: "The legislation on tax and other matters is far too complex and the law is not keeping up with the way people are engaged in the modern labour market".
"That has to change if Britain is to remain competitive backed by a highly skilled, flexible labour force".
Mr Mullin had described how contractors were the ones not getting a level playing field.
He told the House: "The Minister argued calmly, as he always does, that the change is a simply a matter of ensuring a level playing field".
"If he wanted a level playing field, he would be ensuring that workers employed through intermediaries benefit from sickness pay, holiday pay and many of the other advantages of full-time employment. They do not get those same benefits and cannot be compared with people in traditional forms of employment."
The CBI/Accenture employment trends survey published in December 2015 highlighted that "almost all businesses (94%) believe flexibility is vital or important to the competitiveness of the UK's labour market and for prospects for investment and job creation".
Kirsty Blackman, the SNP's spokeswoman on the Lords, questioned Mr Gauke on whether he had considered the "disproportionate impact on rural communities where travel is much more expensive and sometimes an overnight stay is necessary".
Mr Gauke argued the Government was interested in fairness, claiming T&S represented an unfair benefit to those who happen to arrange their employment through an intermediary like an umbrella company but accepted wages would need to rise in some circumstances.
He added: "In terms of whether it would reduce contractors' ability to travel, creating a skills shortage or reducing flexibility and preventing growth, where businesses wish or need to recruit workers living some distance away, the Government expect businesses to pay a wage sufficient to attract workers without any special tax subsidy being necessary".