Any workers covered by the scheme would have fewer employment rights, in exchange for paying fewer taxes – helping employers and making them more likely to be hired in the first place.
The government is considering the scheme in light of the success of so-called mini-jobs in Germany, where it is possible to earn up to €400 (£317) per month and pay no tax, while employers pay a flat rate levy. Workers can then hold several of these mini-jobs at once.
However the reforms are not certain to happen, with a Treasury source explaining “this is very much up in the air, being discussed by ministers this week.”
“It is one of many proposals, and there are lots of factors to consider.”
In part that is due to the difference between the German and British tax and labour regulation systems which would need to be worked through.
Other proposals to deregulate the labour market have made little progress recently.
For example the government commissioned venture capitalist Adrian Beecroft to report on ways to boost employment.
But when he called for no-fault dismissal rules to make it easier to fire workers, an outcry from groups including prominent Liberal Democrats stopped the radical deregulation from being introduced.