Emma today (26 February) warned that the Government may fall short on its pledge to stop workers being ripped off by firms which use loopholes in employment law to reduce the take home pay of their workers by hundreds of pounds each month.
Following pressure from UCATT and Labour MPs, the Chancellor announced in his Autumn Statement that he would be looking at the issue of umbrella payroll companies, which are used by some employers to avoid their tax and national insurance obligations and cut their wage bill. Under the scheme, the burden falls on their staff, who are often told that unless they sign up to the deal they will not be offered further work.
But the Chancellor’s commitment has been questioned after answers to Parliamentary Questions showed that the Government does not plan to limit the use of the umbrella company model, leaving the loophole wide open so that exploitation can continue.
Emma raised her concerns at Business Questions, asking the Leader of the House of Commons William Hague when the Government would be announcing its proposals.
Emma said:
“Following a campaign by the Union of Construction, Allied Trades and Technicians, Labour colleagues and me, the Chancellor announced in his autumn statement a consultation on rip-off umbrella payroll companies. However, recent written answers show that the Government intend only to tinker around the edges and will not close the loopholes that result in workers losing hundreds of pounds per month. Can the Leader of the House tell us when the Chancellor will formally announce his plans to the House and explain why low-paid workers continue to lose out under his Government?”
Mr Hague said he did “not know when the Chancellor intends to present his final conclusions on that” but said that there may be an opportunity to debate the issue when the Budget is announced next month.
You can read Emma’s question and the response in full on Parliament’s website.
The news that the Government may be ignoring the umbrella scam will concern many workers in the construction sector, who are some of the worst affected by the scheme.
Members from the construction union UCATT, supportive unions and MPs attended a rally in Parliament last year calling for the loopholes to be closed.
Emma has repeatedly raised the issue in Parliament. Her efforts were recognised as one of the top political campaigns of the year by Westbourne Communications.
Speaking after Business Questions, Emma said:
“It would be a huge blow if the Government were to ignore the calls of construction workers and other staff who are losing out because of the umbrella company scam. Some of my constituents who are struggling to make ends meet thought the end was in sight; now it seems as though this Government is going to let them down again.
“It’s not too late for the Chancellor to do the right thing and close these loopholes. If he doesn’t, that will just be further evidence that this Government doesn’t stand up for working people.”