Tory Tax Commission recommends £21bn in tax cuts

Lord Forsyth's tax report recommends tax cuts of £21bn (BBC) over the course of the next Parliament - apparently to be funded by growth.  ConservativeHome publishes the report now - download a pdf here.

This £21bn of relief includes a reduction in the basic income tax rate from 22% to 20% and the lifting of 2.5 million low earners from paying any income tax.  The Tax Reform Commission also recommends the abolition of stamp duty on shares (already supported by the Tory Treasury team) and lower business taxation to make the British economy more internationally competitive.  If the Commission had its way inheritance tax would also be replaced by a 'capital gains tax on death'.

Labour's Ed Balls found the report whilst surfing this afternoon.  Apparently it had been premmaturely posted on the Tax Commission CCHQ website.  Mr Balls said that the Tax Commission's prescription would leave a black hole in the public finances:

"The scale of the tax cuts is huge. The problem is there is no indication here at all as to how it will be paid for.  David Cameron has denied he would cut public spending. The hole in the finances that this would create is dangerous for the economy."

Journalists are telling me that Labour are genuinely excited by this opportunity to paint David Cameron as at odds with his own Commission.  Yesterday Gordon Brown highlighted the Tory leader's alleged unfunded promises.

George Osborne has also reacted:

“The Commission have given us a menu of options that merit serious consideration.  Some we will accept, some we will modify and others we may reject. But the framework of our tax policy is now set.  Sound Money means that stability will always come first before promises of tax cuts. We will not be promising up front, unfunded tax reductions at the next election.  We will, however, rebalance our tax system. Green taxes on pollution will rise to pay for reductions in family taxes. This Report sets out some options for doing that.  And we will also embark on a major simplification of business taxes that will pay for a significant reduction in our business tax rates. This report represents a major step in that direction.  The battle for a simpler, fairer and more competitive tax system has begun.”

Related link from earlier today: Cameron should embrace Forsyth

THIS SUBJECT WILL BE THE LEAD TOPIC ON 18 DOUGHTY STREET TALK TV AT 8PM.

Comments

[Stephan Shakespeare]

What an exciting statement from George Osborne. I hope that his is the key phrase: "the framework of our tax policy is now set".

The Conservatives should not be expected to commit to particular tax-cutting or spending proposals. But they seem to have accepted this as the key document from which to debate.

That debate should now be had with the British public. Not peeps at policy, but the serious task of engaging properly with one of the key issues for any government, one of the key responsibilities of any government, what it will take from the people and what it will do with the money.

No party deserves serious consideration which does not address this theme in a proper dialogue that takes those involved and affected - that is, all of us - into the process.

George Osborne appears to have accepted that.

[jo public]

debate unnecessary!My pounds are better off in my pocket than the governments.

[ThePrince]

Is it just me or is Ed Balls a really awful individual. On the Channel 4 news he just looked and sounded foul.

[Tam Large]

Yes, yes, yes!!

Lowering tax increases prosperity and enterprise, which leads to more coming in to the Treasury in the end. Let the people decide how they spend their money, not nanny Cameron, oops, I mean Blair.

[rallie]

The scale of the tax rises are huge. The problem is there is no indication here at all as to how it will be paid for. Gordon Brown has denied he would rase public spending. The hole in the finances that this would create is dangerous for the economy.

[Chad]

"The problem is there is no indication here at all as to how it will be paid for."

Well at least that makes them consistent with Cameron's spending plans.

[Chris Palmer]

We shall now see what Mr Cameron does; whether he is a man or a mouse.

[Stuart Raven]

So if the leadership accept this recommendation how will that sit with the "no tax cuts" mantra endlessly repeated at the Bournemouth conference?

[NigelC]

Rallie, If the cut in tax rates stimulates growth the total amount raised will stay constant or we may be able to raise more money.

However the amount of money wasted by this Government is enormous; even a small reduction in waste would raise large amounts of money.

The key is phasing and the economic cycle. Let's not promise large cuts early as we do not know what the state of the economy will be when we win

[Denis Cooper]

The scale of the mooted tax cuts is not "huge". Off the cuff annual tax revenues are approaching £500 billion, so £21 billion would be something like 4% of that present total. If revenues rose in line with the past trend growth rate of GDP then discounting inflation they would rise by ca £12 billion a year, or ca £48 billion over four years; instead they would rise by ca £27 billion over that period. Not so?

[Ted]

Denis -
you are quite right the tax relief is about 1.5% of GDP as against GDP growth of 2.5%, I think it's called "sharing the proceeds of growth" isn't it?

Balls & Brown tried to point out last year that "STPoG" meant reductions in tax burden over time except they called it "Cuts" - seem to remember figures of £20bn plus being mentioned.

Now that Forsyth has put STPoG into figures and said how this could be used to simplify taxation everyone seems surprised.....

[david]

On channel 4 news, it would have been a good idea if Howard Flight had looked at the camera once, he looked shifty.

[Denis Cooper]

Emphasise that tax revenues will not be cut, they will continue to rise.

[Ted]

Denis

Tax revenues would indeed rise and if increased competitiveness and reduction in tax avoidance (as happened in mid 80's) resulted in increased GDP growth then the actual take could rise above the figures you quote.

Gordon Brown in this years budget quoted possible higher savings by keeping the increase in spending below increase in GDP "I have also received representations that we should adopt a third fiscal rule, that over the economic cycle and regardless of the needs of the economy, infrastructure and services – public spending and investment must, as a matter of principle, always rise slower than growth.
Having analysed this proposal against our published plans I have found it would require in the coming year public spending £17 billion lower and £16 billion lower the year after, closing off the possibility of additional investment. I have rejected these representations."

Our spokesmen should be studying that speech because it includes most of the arguments he and Balls will try to develop.

[Rob Largan]

All sounds very interesting. Perhaps Cameron and Osborne are planning to go to the electorate saying look, these are our ambitions, and if possible this is what we will deliver, but we cant promise anything.

I suppose that could be acceptable.

[eugene]

YES!!

[Sean]

This report places the issue of tax reduction in the public forum where we can fairly accurately engage public opinion. After 9 years of steadily increasing taxes and huge sums being spent, and wasted, in the public service, the British people might want a change of direction.

At least it will shut up Labour about Camoneron not having substance.

[John Moss]

Tax reform can work. Many other countries have recently embarked on
programmes of tax simplification, base broadening and rate reduction. Examples
include Australia, New Zealand, the Netherlands and Ireland. These countries
have cut their tax rates and simplified their tax systems. At the same time, they
have achieved budget surpluses and enjoyed strong economic growth. This in
turn has made further reform affordable.

This is probably the most important paragrapgh in the report. If a BBC lefty or a union no-brain asks you which services will be cut to pay for these reforms, point them at para 1.1.5 of the executive summary and say, "None".

[Richard Carey]

On channel 4 news, it would have been a good idea if Howard Flight had looked at the camera once, he looked shifty.

I'm concerned that Flight's promoting our tax policies. Because that worked out so well the last time!

The problem is there is no indication here at all as to how it will be paid for."
Well at least that makes them consistent with Cameron's spending plans.

The report from the TRC, as you know Chad, has presented a menu of options from which to pick in our (okay, not yours) policy making. Of course this has to be reconciled with public spending commitments and the state of the economy at the time.

In even the executive summary of the report, it states that in the event that you were to order the whole menu immediately, it would amount to around 1.5% of GDP, with the current long-term trend rate of economic growth running at around 2.5%. That's of course assuming that has survived Gordon Brown, a man you are publicly committed to helping to achieve at least one full term as PM, by the way.

This is entirely in keeping with our approach of "sharing the proceeds of growth".

[David DPB]

"Clearly, the precise timing of their introduction should be a matter for the
government of the day. The speed with which they can be introduced will, of
course, have to take account of the prevailing economic and fiscal conditions and
other political priorities. The destination should, however, be clear."

Sounds rather like the Osbourne position.
It's on page 10 of the report, but I suspect the media will conviniently ignore it.

[Richard Carey]

Sounds rather like the Osbourne position.
It's on page 10 of the report, but I suspect the media will conviniently ignore it

Sounds rather like an obvious commmon-sense position, which means that the MSM probably will ignore it, in their attempt to try and find a "leadership splits from policy comission" process story to write!

[Ben Herbert]

As much as I believe in a low tax economy, David Cameron really must stand firm on this. If he backs down to the right wing of the Conservative Party, his credibility with the swing voters who are beginning to listen to him will be hugely damaged.

[Yet Another Anon]

At least it will shut up Labour about Camoneron not having substance.
Except that already George Osborne and David Cameron are saying that it is just a set of ideas and are indicating that they are ready to junk a lot of it, if they scrap a lot of what their policy reviews say then they run the risk that the liberals who David cameron is trying to attract will believe that the reports are a secret agenda to continue things as they were, many others will see it simply as Blue Labour and of course if it is simply a dilute version then it will lack substance - it's possible that the policy reviews will result in more confusion than ever, surely it would have been better to refer to them as ideas reports - having said they were policy reviews people expect them in the main to be accepted.

[Richard Carey]

As much as I believe in a low tax economy, David Cameron really must stand firm on this. If he backs down to the right wing of the Conservative Party, his credibility with the swing voters who are beginning to listen to him will be hugely damaged.

From what DC has said, Ben, I don't think you're likely to be disappointed on this - and rightly so. Brown (assuming it is he) is surely likely to run on serious, responsible stewardship of the economy. In response, We need DC to steer a firm course and make a serious case for economic stability and strong public services alongside tax reforms that contribute to fulfilling Conservative principles of social justice.

[Daniel Vince-Archer]

"Except that already George Osborne and David Cameron are saying that it is just a set of ideas and are indicating that they are ready to junk a lot of it, if they scrap a lot of what their policy reviews say then they run the risk that the liberals who David cameron is trying to attract will believe that the reports are a secret agenda to continue things as they were, many others will see it simply as Blue Labour and of course if it is simply a dilute version then it will lack substance - it's possible that the policy reviews will result in more confusion than ever, surely it would have been better to refer to them as ideas reports - having said they were policy reviews people expect them in the main to be accepted."

From what I understand, the Forsyth Commission was established by Michael Howard, not David Cameron.

David Cameron made it very clear during the leadership election that economic stability would be prioritised over tax cuts and he was subsequently elected leader by a significant majority of the party membership, so I think anybody that expects him to abandon that position now is being a bit unreasonable to be honest.

[David DPB]

"Except that already George Osborne and David Cameron are saying that it is just a set of ideas"

But that is all it is. As noted above, the document itself allows for the fact that the economiy and other political issues may prevent the implementation of the proposals.

Hopefully the other policy reports will be like this, providing a menu from which the Conservatives can select an appropriate and properly thought out policy platform to match the prevailing political and economic situation of the time.

[RodS]

Tremendous boost for morale despite the protestations of Dave that these are merely ideas. It will be taken as the intended direction of Tory policy and quite right too. My cynical 25 yr old son perked up at the news headlines and said his mates would respond to this kind of thinking. I thought Howard Flight did well on Channel 4 News and just kept on talking over the interviewer despite Ed Balls continually asking hoim if he was on the A List. Most viewers wouldn't know what Balls was talking about - and he looked a pillock anyway.

[Yet Another Anon]

Ed Balls
I wondered for a minute if he had received a promotion I hadn't heard of as Channel 4 appeared to have it up on the screens that he was Chief Secretary to the Treasury rather than Economic Secretary to the Treasury but checking showed this was Channel 4's mistake.

[Stuart Raven]

The more I see of this the more I like it. Mike Forsyth's proposals will stimulate the economy and restore freedom to the individual.

It's up to every true Tory in the country to make sure this vital package is forced through.

Only through tax cuts can we restore the party's badly damaged credibility.

[hf]

The handling of this is sloppy. We have proposals coming out providing ammo to our opposition underming the credibility we were trying to build up.

A dozen scare stories have been launched and Labour are using this to say that it will lead to higher interest rates in a land stuffed to the brim with mortgages...... We cannot even say what bits will be policy. So why are they being published? How exactly does publishing this add votes?

Just who is handling our communications?

[Matt Wright]

I think there are real dangers in going for big tax cuts. Labour are champing at the bit to say we are irresponsible etc. The public perceive tax cuts to equal service cuts. The only option if we must go for tax reform is as Osbourne says ie simplify and reduce corporate tax in order to help business generate more money for society,

Matt

[Andrew Ian Dodge]

Surely its pretty simple. Tell the people that the Tories will do away with the death tax. Its a perfidious tax that is straight Marxist anti-inteherited wealth tripe. It does not raise much more than it costs either.

[Jamie Hill]

I vote conservative because they're the only party in the United Kingdon with a history of preceding over a low tax economy.

GB has wrecked this country with his stealth assault on pensions and income. Inheritance tax is immoral, and a pledge to scrap it would be a good start.

[James Hellyer]

From what I understand, the Forsyth Commission was established by Michael Howard, not David Cameron.

It was George Osborne who set up the tax commission way back in the leadership election. It was part of his dalliance with flat taxation (which wasn't a leadership election gimmick for his buddy, oh no).

[Max Tax]

Now......where have I heard something like this before............

http://www.ukip.org/cgi-bin/axs/ax.pl?http://www.ukip.org/pdf/ukipflattaxpolicy.pdf

[toff party]

James is entirely right about the motivation. Fortunately, Michael Forsyth is rather more serious than than, Unfortunately, our party is now run by the trust fund set, for whom considerations of tax rate changes have no meaning at all.

[Roger Helmer MEP]

Thank Heaven for the Forsyth Tax Commission! As Conservatives, we should live and breathe low taxes and smaller government. We shouldn't need to be "pressured into tax cuts". Above all we must challenge the Labour myth that lower tax rates mean lower revenues and the closure of schools and hospitals. Like so much in politics, the Labour position is wonderfully plausible, but it's also wrong.

[Chad]

What is so excellent about Lord Forsyth's work here is that Cameron's tax'n'spend Tories will reject most of the proposals leaving UKIP free to slot them into our position as the low tax party.

If that happens, I'd love to see Osborne criticising our tax policies when they have been researched and funded at his behest!

[Lisa Bailey]

At the time of the Party Conference I was becoming really disillusioned with Mr Cameron (although I vuted for him) and the leadership.

It seemed that everybody in the party was screaming for tax cuts and that Cameron and Osborne were the only ones who were out of step.

The news of Lord Forsyth's proposals is truly wonderful. It shows that the commission understands the election-winning policies we have been crying out for.

Lord Tebbit and Edward Leigh spoke for 99% of Tories when they asked Mr Cameron to stand by our policies and John Redwood set out an unarguable case for tax cuts

Edward Leigh was right when he said Mr Cameron risked becoming a "recruiting agent" for the UK Independence Party because of his failure to offer voters "robust Conservatism".

The party is now at last making the intellectual case for tax cuts without which we would face losing the next election.

As a result of this news I have every intention of staying in the party and fighting for tax cuts.

[StephanShakespeare]

Whoops! Just heard Osborne on R4 saying that any cuts would be offset by new taxes. And he's continuing to make the idiotic contrast between tax cuts and 'stability'.

So I have to retract my first excited comments on this thread. There's going to be no attempt by the party to engage intelligently with this issue.

For those who were up early, you might have heard Ernst & Young analyst saying the Forsyth proposals are coherent, so long as they are taken as a whole and not in pieces.

Fat chance.

[Chad]

This really is a massive opportunity for UKIP to establish their low tax credentials.

I'd like to see George using the "worked them out on the back of a fag packet" line this time.

[Penultimate Guy]

RE: John Moss @ 21:27

If a BBC lefty or a union no-brain asks you which services will be cut to pay for these reforms, point them at para 1.1.5 of the executive summary and say, "None".

Er, except that Osborne is this very morning doing the rounds of all the radio stations saying that any cuts will be offset by (unspecified) green taxes. It won't be long before some commentator points out that this strategy is already Liberal Democrat party policy.

[Richard]

To those who point out that tax cuts will increase government revenues - this is actually a bad thing because it increases the size of the state. Our aim should be to reduce the percentage of GDP swallowed up by the Government.

"However, Economic Secretary to the Treasury Ed Balls said the "huge" tax cuts would not help ordinary families and would leave a hole in public finance." (from the BBC website)

That's right Ed, raising the threshold won't help ordinary families at all. Ignoramous.

[Prentiz]

Interesting proposals - and, for all their 'non-policy' status, welcome. However, seems to be a rather glaring lacuna in the form of council tax - certainly one of the most contentious areas of tax increase under Brown and Blair and, at least in the CCHQ summary, not mentioned at all.

[Stuart Raven]

Osborne's whinge about "Green Taxes" is contemptible.

As he well knows Green Taxes aren't primarily intended to raise revenue. They are intended to penalise polluters.

The desired outcome of Green Taxes is a reduction in pollution and therefore a reduction in tax paid. The (unattainable)ideal would be no pollution and no tax.

When are we going to get right on track with the Forsyth proposals? Seems that Cameron, Osborne, oh and our very own Gareth, are the only Tories out of step.

Do catch up please.

[Simon]

Rather than criticize Labours handling of the economy, the huge debt levels and truly awful house prices, the Tories seem to be aligning themselves behind Labour

We've heard how the Tories want to preserve the value of peoples houses and keep interest rates low, yet they also claim to want to remove the barriers to homeownership. It is clearly impossible to remove the barriers to homeownership when you want to prop house prices up at unaffordable levels (the only barrier to home ownership). Interest rates are supposedly set independently now so how can politicians promise low interest and mortgage rates? And low interest rates are the reason for massive levels of debt and house prices and the resulting wealth gulf housing has created.

The Tories have also followed Labour down the Shared Ownership route which boosts house prices and makes the problem worse. For people like me who can't afford a home in the UK the Tories offer NO alternative to Labour.

[Chad]

I thought Osborne had a good conference but today was his day to stand up and be counted by making the case for lower taxation so ably made by Lord Forsyth, instead, he has put on a red nose and face paint had come up with what is clearly the most insincere and dishonest and amateurish answer.

All it will take is for one interviewer to ask Cameron or Osborne what the aim of their 'green' taxes are.

If they say to help the environment by changing behaviour, the obvious follow up question is how will they plug the gap left by falling revenue when behaviour changes?

Clowns.

[Mike Christie]

"To those who point out that tax cuts will increase government revenues - this is actually a bad thing because it increases the size of the state. Our aim should be to reduce the percentage of GDP swallowed up by the Government"

You seemed to have missed half the argument. The idea is that a tax cut increases tax take because of the subsequent economic growth. Tax falls as a %of GDP but GDP rises by enough to more than offset the cut.

[Mike Christie]

Simon, you tell the homeowners of Britain that you're happy to see their mortgage payments go up by 50% (a 3% rise in interest rates would do that to a interest-only mortgage) and see how close to government you get!

This is why 'stability before cuts' is so important.

People still talk about the high interest rates around Black Wednesday as a reason not to trust the Tories. If you have an interest-only mortgage at 5% and the rate goes up to 6%, your payment goes up 20%. talk about rises of .5% or 1% in the interest rate sound like nothing, but they turn into mortgage repayment rises of 10 and 20%, that's without taking any other loans/debts peopl may have into consideration. For most people that would wipe out even the most generous tax break.

[Grand Central]

Simon has completely misunderstood the relationship between house prices and affordability. The relevant measure is monthly payments as a proportion of your income - not the total price of the house. If interest rates doubled and house prices halved, your monthly payments on a new home would be unchanged.

Houses are much more affordable than they were in the early and mid 90s, though less affordable than five years ago.

[Simon]

No I haven't Mike. It is true that payments remain roughly the same but it doesn't take a genius to work out that it is FAR FAR better to buy a lower priced home with a small mortgage at a higher rate than to buy a high priced home with a HUGE mortgage at an ultra low rate. What happens when rates have to rise? You are exposing yourself to a massive risk.

Also savings go almost nowhere today whereas they would go a lot further with much lower prices. What use are low rates when prices rise disproportionately as a result.

It is widely acknowledged that house prices are now more unaffordable than ever, if they were so affordable politicians wouldn't have to dream up schemes to give selected people a leg up. Unaffordable housing is in few peoples interests.

[Mike Christie]

Grand Central, you miss one very important factor of high house prices, the deposit.

You are right, that in many cases the monthly payment on an expensive house might be less now than on a much cheaper house in the past.

However if that house costs £250,000 you might need to find £12,500 or even £25,000 as a deposit.

[Simon]

Sorry Mike, I meant Grand Central.

[Peter]

From a quick look at the proposals(and any one who says anything else is on a different planet). A lot of what been said in terms of the 40 proposals would fit in to what David Davis was supporting last year so with that I have no problem with supporting whats been said. This through is only part one as what the report states it doesn't include VAT, Council Tax, Business and Envioronmental taxes. With this I feel the £21Billion black hole will be filled. Best thing through is the detail given why flat tax works in countries like Russia, Georgia, Serbia, Ukraine etc is the 40%+ tax avoidance compared to at most 12% here in the UK. With all the above I can't see any rational Conservative would be against what been said.

[Chris Thompson]

COMMENT DELETED BECAUSE OF IMPOSTERING.

[Opinicus]

And by a happy coincidence £21bn is the cost of the Barnet formula and our membership of the EU - give or take change.
Whose for funding these tax cuts now?

[Denis Cooper]

What tax cuts? Under the proposals in this report, tax revenues would continue to rise. It's just a pity that it refers to "tax cuts" all the way through, when in fact it's only proposing to moderate the rate at which taxes have been increasing.

[ratbag]

Firstly Ed Balls - the man is "really awful" as ThePrince said above. He's also extremely clever and knows his brief backwards and forwards. BUT the good news is that his constituency has been abolished and he's lost his court case to keep it. So he's footloose which should distract him a bit!

The leadership's handling of what should have been a triumph has turned victory into a soggy mess. The core vote won't stand for Cameron's attitude to this. Last week's by-election up Loughborough way says it all.

Results were :- Lab 643 (38.7;-17.0), BNP 478 (28.8;+28.8), Con 386 (23.2;-21.1), Lib Dem 155 (9.3;+9.3)

This means Labour LOST 131 votes, Tories LOST 103 votes, LD gained 13 votes and the BNP- - well you work it out.

The government's unpopular and many Tories trust Cameron even less and cannot be cajoled to vote Tory.

When will the Toyboys of CCHQ wake up?

[ratbag]

Just because, Prentiz, a daft chairwoman in the shape of La May called us "the nasty party" doesn't mean it was true! It means she was out to do us harm - or was brainless

[Yet Another Anon]

This means Labour LOST 131 votes, Tories LOST 103 votes, LD gained 13 votes and the BNP- - well you work it out.
and the BNP hadn't been standing last time so no one knows what vote they would have got last time - Council by elections though frequently are very localised, there isn't the focus on national issues that there is in a full set of Council Elections or a General Election or a Parliamentary By-election.

[Yet Another Anon]

It is widely acknowledged that house prices are now more unaffordable than ever, if they were so affordable politicians wouldn't have to dream up schemes to give selected people a leg up. Unaffordable housing is in few peoples interests.
This is the culmination of decades of encouraging owner occupation whether it was suitable to the person or not, there needs to be more social housing especially Housing Association and as in other countries people could be encouraged to see their home as somewhere they lived rather than an investment.

[James Maskell]

As soon as we have the beautiful aroma of tax cuts dangled in front of us close enough we can touch it, its cruelly taken away from us by Osborne. What a cheap and nasty trick...

All we are offering at the moment are upfront tax increases along with continued high expenditure. This is Socialist thinking...wheres the responsibility revolution, Cameron?

[ratbag]

To ignore the message of the Loughborough by-election as Yet Another Anon does, is head-in-sand stuff. Which ever way you look at it Labour lost heavily, the Tories did even worse, the LDs stood still and the BNP gained massively AND put the total poll up too.
Many of us core Tories will not vote for Cameron - we don't trust him, especially after his broken promise and we don't like his general attitude. The opinion polls are showing depressing and worsening figures. Actual polls are worse still.

David Davis got it right today when he urged us to stop talking about policy reviews and get on with selling our basic beliefs to he public.

[Paul]

I can find no mention of the iniquitous tax known as IR35 or more officially as the intermediaries legislation. This has often been at or near the top of Stealth Taxes created by Gordon Brown.

Currently 1411 people have fought the Taxman on this and won, only 3 were found within the regulation. These investigations have taken an average of 2 years and some are taking more than 4.

It is almost impossible to determine ones liability, since to do so requires you examine contracts you have never agreed to, never seen and have no right to. It drives a coach and horses through the priciple of privity of contract to prove something which is not true, in the real world

In any survey a sample of 1400+ would be a good sample. Well if out of our 'sample' more than 99% are outside then that reasonable should be true for the rest of the independent contractors and consultants. So either the tax office is taxing people who owe no money, or wasting millions chasing people for no gain to the exchequer. Either are good reasons for it's abolishment.

IR35 requires that one pay Employment taxes on the income of a company. This is called the 'deemed' salary. It's not a salary that the worker has recieved but he has to pay it. He does not become an employee of anybody other than the company he works for.

These people are described as 'disguised' employees. What is one? One should either be an employee (in which case pay the tax) or not.

His deemed employer pays no Holiday Pay,

He (the worker) pays all employment taxes (Employers, Employees NI and Income tax)

He has to out of taxed income pay any SSP, SMP, SPP.

They have no rights to redundancy, grievence procedures or anything that a traditional employer is required to provide.

It should go.