The Professional Contractors Group and the Recruitment and Employment Confederation have sent a joint letter to Chancellor George Osborne deriding his plans for proposed restrictions on self-employment.

PCG and REC both feel that the plans will hurt job creation and negatively affect the UK’s economic growth. With the Budget announcement looming, the groups want to warn Osborne of the damage his proposals could do.

The Chancellor wishes to stop self-employment being an option for those who source work via employment agencies. They say that doing so will create rigidity in the labour market, raise the cost to employers of accessing flexible labour up to 25%, and have a negative impact on integral growth sectors like construction, oil and gas, engineering and IT.

With both organisations representing 22,000 contractors and over 3,500 recruitment businesses, they hold some sway. They want the Government to put off their plans in order to allow businesses some breathing room to renegotiate contracts and adjust project budgets to accommodate changes.

The REC’s chief executive Kevin Green said: “This draft legislation was sprung on businesses at very short notice. There is now less than a month to go before the new rules would come into effect and the government still hasn’t published its final guidance for employers. This scramble to implement shows a lack of understanding about how business works and the complexity of contracts for long-term projects. If these changes are rush through they risk having a negative impact on job creation and growth in sectors that are vital for the recovery of the British economy.”