Create a single worker status: calculation note

Central fiscal result

+£0.6bn - Net public-finance impact in 2027-28

Low case: -£2.0bn. High case: +£5.0bn. Positive numbers are fiscal costs or borrowing pressure. Negative numbers are Exchequer savings or receipts.

Scenario and baseline

• Replace employee, worker and dependent-contractor boundaries with one core employment status.
• Baseline is current law and published official data unless stated.
• Private business costs are excluded unless they affect tax or procurement.
• Target year is 2027-28, with later years shown separately.

Affected population

• Unit is workers/contracts, not employee jobs.
• Central exposure is 1.5m dependent or insecure workers.
• Employee and tax status are not identical.
• Public procurement exposure is partial.

Gross impact

• Central affected population is 1.5m workers/contracts.
• Employer-rights cost uses £1,200 per affected worker.
• Public procurement exposure adds £0.60bn.
• Possible tax recategorisation offsets £1.00bn centrally.

Fiscal build-up, central case

• Employer-rights cost in public/procurement: +£0.90bn
• Tribunal and enforcement costs: +£0.25bn
• Public procurement pass-through: +£0.60bn
• Tax-status receipt gain: -£1.00bn
• Benefit and wage-tax offsets: -£0.15bn

Central net impact: +£0.6bn in 2027-28.

Behaviour and pass-through

• Low case assumes tax alignment raises receipts.
• Central assumes partial tax recategorisation only.
• High case assumes high public pass-through and disputes.
• Employers reduce some marginal contracting.
• Some work shifts into genuine self-employment.

Phasing

• 2026-27: +£0.2bn. Guidance and disputes.
• 2027-28: +£0.6bn. Main status change.
• 2028-29: +£0.8bn. Case law develops.
• 2029-30: +£1.0bn. Contracting model adjusts.

Main source groups

• Department for Business, Energy and Industrial Strategy, "Good work: the Taylor review of modern working practices" (2017): The Taylor Review highlighted problems from unclear employment status and insecure work; sets the policy problem behind single worker status.
• HMRC, "Employment status" (2026): HMRC guidance distinguishes employment status for tax and employment-law purposes; shows why status reform may affect receipts.
• Department for Business and Trade, "Employment Rights Act 2025 - Economic Analysis" (2026): The ERA economic analysis estimates around £1bn annual direct business cost before social-care bargaining; provides official baseline costs and affected groups.
• Department for Business and Trade, "Employment Rights Act 2025 impact assessments" (2026): The IA collection separates guaranteed hours, unfair dismissal, fire and rehire, union and equality measures; prevents treating broad rights packages as one undifferentiated pledge.
• Ministry of Justice, "Tribunal Statistics Quarterly: October to December 2025" (2026): Employment Tribunals received 13,000 single claims and had 58,000 open single cases in Q3 2025; shows enforcement capacity is already a binding risk.
• Autor, Kerr and Kugler, "Does Employment Protection Reduce Productivity?" (Economic Journal, 2007): Employment-protection changes can reduce productivity where firms face higher firing and adjustment costs; supports caution on policies that raise dismissal, scheduling or adjustment costs.
• DiNardo, Fortin and Lemieux, "Labor Market Institutions and the Distribution of Wages, 1973-1992" (Econometrica, 1996): Labour-market institutions can compress wage inequality through wage floors and bargaining power; useful for distributional channels, not for claiming free fiscal gains.
• Green Party of England and Wales, "Workers' Charter 2026" (2026): Used to define the pledge wording, policy scope and implementation scenario being modelled.