Emma asks Chancellor why he didn’t tackle exploitative Umbrella companies and false self employment in Autumn Statement

November 28, 2016


On Wednesday Emma questioned the Chancellor on Umbrella companies after he presented the Autumn Statement to the House. The Statement was confirmation of six years of Tory failure, with borrowing up to £122 billion – the highest percentage of GDP in over 50 years.  Growth is down and there was no help for social care, no additional money for the NHS, emergency services or the disabled. Indeed, they will still have to find billions in efficiency savings. However, the Chancellor did find £240million for grammar schools. 85% of income tax cuts still to come in this parliament go to the richest half of households and the working poor are the ones that will bear the brunt of the cost of Brexit.

Following the Autumn statement, Emma asked the Chancellor about sham Umbrella companies and false self-employment. In 2014 Emma led a campaign alongside UCATT, the trade Union for construction workers, when changes were introduced governing how employment agencies and payroll companies could employ workers. Under these changes, any worker considered to be engaged by an agency or a contractor could no longer be classified as self-employed. It was hoped that this would result in construction workers being paid on a normal PAYE basis but this did not occur; instead overnight thousands of construction workers were given no option other than to operate via an umbrella company.

At that time, Emma warned that the tax-dodging practice, which requires workers to pay both the employers’ and employees national insurance contributions would spread to other sectors and now it has . Workers are subject to lower pay, zero hours contracts and no paid holiday. Many sectors are now affected by these tax avoidance contracts. Teachers’ union NASUWT says almost a third of supply teachers have been forced to join an umbrella company in order to get work from an agency.

In October, the GMB Trade Union took Uber to court over claims that the company had failed to acknowledge its driver’s basic employment rights such as paying the national minimum wage. Uber argued that the drivers were self-employed, but the court ruled in favour of the drivers, declaring that Uber, as a business, was obliged to offer their drivers basic workers’ rights.

Despite this ruling and despite government promises to sort out this practice following the campaign in 2014, the government have still not closed the loopholes.

You can read Emma’s question and the Chancellor’s response here.

Speaking after the debate Emma said,

‘It is astonishing that after consulting and reviewing for a number of years the Chancellor has decided that now we have a new Prime Minister another review is needed.  The Government have known for a long time that these practices are exploiting workers. Instead of messing about with review after review they need to just get on with sorting it out’


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