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INSECURE and low-paid work is costing the Treasury an “eye-watering” £10 billion a year, according to new data.
A new report by the TUC reveals that low-paid self-employment, zero-hours contracts and other forms of precarious work are “starving” the public purse by reducing the government’s tax take and increasing social security payouts.
Low-paid self-employment costs the Exchequer an “eye-watering” £9.7bn every year, while zero-hours contracts punch a further £614 million hole in the public finances, the study finds.
This is because low-paid self-employed workers and those on zero-hours contracts earn significantly less than regular employees, so they pay less tax and National Insurance, while they are also more reliant on social security payments to top up their incomes, the report points out.
More than one million people are currently on zero-hours contracts and 3.6 million are in insecure work, including those in low-paid self-employment.
The report says that the total being lost to the Treasury from the prevalance of low-paid precarious work is more than £192m a week.
The £10bn annual cost of insecure, low-paid work is the equivalent of 38 per cent of England’s annual adult social care budget, according to the TUC.
General secretary Frances O’Grady said that the “epidemic” of insecure work in this country was “starving” the public finances, adding that the “government’s failure to clamp down on shady employment practices is costing the Treasury a fortune.”
Institute of Employment Rights director Ben Sellers said: “For 40 years we’ve been on this trajectory.
“The only way to reverse this trend is the restoration of sectoral collective bargaining, trade union recognition and power in the workplace.”
The study comes as a new survey by jobs website CV-Library revealed that only one in 10 workers has been told to expect a pay increase and that about one in 12 know they will received no rise at all.
The survey revealed that three-quarters of all workers felt that their employer showed no sympathy for staff struggling with the growing pressure of the cost-of-living crisis.
CV-Library head Lee Biggins said it was vital that businesses “take action and at least open lines of communication with their employees.”
