Coronavirus exposes Britain’s bogus self-employment problem
- Millions of Britain’s self-employed workers can now apply for financial aid to help them through the coronavirus crisis. The government has announced support of 80% of their average monthly earnings up to a cap of £7,500. It comes as a relief for many – there are 5.2 million registered self-employed people in the UK. But a large number will not be able to benefit.
- This is because of the phenomenon of bogus self-employment, which has many workers registered as self-employed but actually working on insecure contracts for the same employers day in day out. It has been an issue in Britain for decades and escalated significantly following the 2008 financial crisis. Now the coronavirus crisis has hit and the issue is coming home to roost.
- I wrote about this in 1995 in relation to the construction industry. Self-employment exonerated employers from paying any National Insurance for the labour services they engaged, and with lower rates of tax and insurance for the self-employed, a powerful fiscal drive pushed millions of building workers into false self-employment.
- It has become a uniquely British disease, unparalleled in Europe, with 60% of manual construction workers self-employed.
Source: The Conversation