Is the gig economy working for you? A new TUC report estimates it is costing the government billions
The growth of insecure employment is costing the government an estimated £4bn a year, according to a report by the TUC.
It claims the rise in low-paid self-employment – from which less income tax and National Insurance contributions are collected – accounts for just over half of this bill, while a surge in zero-hours contracts has left an additional £1.9bn hole in the public finances.
It comes as the government launches a review into working practises, taking evidence from workers and businesses, amid a huge increase in the so-called gig economy, which encompasses firms like ride-hailing app Uber and couriers Deliveroo and CitySprint.
The TUC said last week that waiters, care workers and education staff are among 660,000 more workers employed without guaranteed hours or basic employment rights in the past five years.
Matthew Taylor, the chief executive of the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) will launch a regional tour in London to listen to the views and experiences of workers, self-employed staff and companies.
He said: “Most people recognise that we need as many jobs as possible in our economy and that the flexibility of our labour market is a strength.
“But people also want work to be fair and decent and to offer opportunities for progression and fulfilment.
“The question is, what can we do to make work better without undermining our country’s excellent record on job creation?
“We’ve started working through these complex issues questions and now is just the right time to hear the views of businesses, employees, the self-employed and the public as a whole.”
Business minister Margot James said: “The Matthew Taylor review is hugely important in helping us understand whether employment rights need to change to keep up with the various new ways people can work.”
TUC general secretary Frances O’Grady said the rise in insecure work was “punching a massive hole in the public finances” as well as being “bad for workers”.
“Bosses who employ staff on shady contracts are cheating all of us. That’s why we desperately need more decent jobs that pay a fair wage.”
Last week a plumber won the latest round in campaigns to win rights for the growing army of self-employed workers, when the Court of Appeal rejected an appeal by Pimlico Plumbers on the employment status of former worker Gary Smith.