Low-paid work costing economy £10 billion per year

Insecure and low-paid work is costing the UK Treasury £10 billions every year, according to a report from the Trades Union Congress (TUC).

The union has blamed the government for not doing more to combat the issue.

Using data from 2021, the report showed insecure work practices such as low paid self-employment and zero-hours contracts had reduced the government’s tax take and increased social security payouts.

Insecure work in action:

Millions of UK employees trapped in low paid and insecure work

Young ethnic minorities continue to bear brunt of insecure work

BAME workers more likely to be in insecure work

Low paid self employment is therefore costing the Treasury £9.7 billion per year, while zero hours contracts added a further expense of £614 million. 

TUC general secretary Frances O'Grady argued that this issue is diverting resources away from where they're most needed.

She said: “Britain’s insecure work epidemic isn’t just punishing workers - it’s starving the public finances too. The government’s failure to clamp down on shady employment practices is costing the Treasury a fortune every year - and that means less funding for our cash-strapped hospitals, care homes and schools.”

O'Grady added that the government should deliver on the employment bill which it promised back in 2019.

The bill promised to solidify worker's rights to join trade unions, as well as amending the definition of "worker".

It is expected that the bill will not be part of the queen's speech this year.  

O'Grady added: “The time for excuses is over. Ministers must stick to their word and deliver the long overdue employment bill. Leaving insecure work to flourish unchecked would be an act of betrayal and would send a green light to bad bosses to carry on cheating their workers and the taxman.”

The TUC urged government to use the legislation to ban exploitative practices such as zero-hours contracts, give all workers - including those who are self employed - equal rights, and penalise employers who mislead staff about their employment status.