Zero hours contracts and low paid work cost the government billions each year, TUC warns

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The TUC estimates that low-paid self-employment costs the Treasury more than £9 billion a year

Badly paid and precarious work costs the state billions each year, which according to the trade union congress (TUC) should be used for “scarce hospitals, nursing homes and schools”.

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TUC General Secretary Frances O’Grady has urged the Government to introduce the “long overdue” Employment Bill in the Queen’s forthcoming speech to tackle various forms of precarious work.

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What is the cost to government of low-paid and precarious work?

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Low-paid self-employment costs the Treasury £9.7billion each year, according to the TUC, while zero-hour contracts cost an additional £614million.

The organization said precarious employment practices are effectively “starving” public coffers, forcing the government to spend more on social security programs to fill workers’ income gaps.

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Since workers on zero-hour contracts and other forms of precarious employment earn significantly less than regular workers, their employers are effectively subsidized by the taxpayer.

The TUC also points to reduced taxes and social security contributions as the cause of the large fiscal deficit.

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Secretary-General Frances O’Grady said: “Britain’s plague of insecure work is not only punishing workers, it is starving public finances.

“The government’s failure to address shady employment practices costs the Treasury a fortune every year.

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“That means less funding for our cash-strapped hospitals, nursing homes and schools.”

Is the Labor Code mentioned in the Queen’s speech?

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The TUC reiterated calls for the introduction of an Employment Act that would tackle various forms of precarious work.

The bill, which has long been promised by the Government, is unlikely to appear in the Queen’s speech this week.

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Ms O’Grady said: “Ministers must be true to their word and bring forward the long overdue Employment Bill.

“Letting precarious work to thrive unchecked would be an act of treason.”

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A Government spokesman said: “We are committed to building a high-skill, high-productivity, high-paying economy that delivers on our ambition to make Britain the best place to work in the world.

“This includes ensuring workers’ rights are fully protected while promoting a dynamic and flexible labor market.”

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