Bogus self-employed costs economy £5bn

Unions have warned the government about the dangers of bogus self-employment

Ucatt general secretary Alan Ritchie told a select committee the exchequer was losing around £5bn a year through bogus self-employment – the equivalent of 20 new hospitals.

He also warned the failure of the Olympic Delivery Authority to agree a common site rate for different professions for the Olympics was a potential “recipe for an industrial relations disaster”.

MPs heard evidence from Ucatt, Constructionskills, and Unite in the second oral evidence given by the Department for Business, Enterprise and Regulatory Reform (DBERR).

Unite T&G section national secretary for construction Bob Blackman commented on the rise in accidents by self-employed workers, particularly in the refurbishment sector.

Both unions also warned many migrants were classed as self employed and risked exploitation.

When asked if the industry would benefit from more direct labour Constructionskills chairman Michael Latham said he could not answer because the organisation was “bound by stakeholders”. After further questioning Latham answered: “Yes, that’s my personal view.”

In response to concerns about the skills gap worsening as self-employment increases, Constructionskills said it was not only offering 7,000 apprenticeships but qualifying around 20,000 people through colleges and 55,000 people through on-site assessment and training.

According to Ucatt statistics 50% of the construction industry, around 1m workers, are engaged in bogus self-employment.