January 20, 2015 : Jenny Bloomfield
Low Pay BritainTax dodging and ducking the minimum wage aren’t okay, but they’re happening across Britain today – and we’re all losing out because of it.
Last night I watched Channel 4’s Dispatches programme on Low Pay Britain. I learnt that self-employed was the new incapacity benefit, with job centre workers having targets to push people into ‘self-employment’ by becoming an ‘e-bay seller’ and the like (an e-bay seller being someone who sells stuff on e-bay, i.e., all of us when we’re emptying our wardrobes/cupboards/attic) – just like when previous governments moved people onto incapacity benefit to bring the unemployment figures down.
I also learnt about guys from Eastern Europe who are brought over as temporary ‘apprentices’ for warehouse work. After twelve weeks they are sacked because after twelve weeks they would be entitled to proper employment rights. And the misclassification of them as an apprentice lets employers pay them far less than they would have had to otherwise (the minimum wage for apprentices is just £2.73 an hour).
Massaging unemployment figures, tax dodging, and ducking the minimum wage aren’t okay
Then I got to learn about a lovely gentleman – let’s call him Mr Dodgy – who teaches companies how to avoid taxes, how to avoid the minimum wage, and also claims a fee for his ‘services’. Wins all round according to him.
But my ‘favourite’ revelation of the night was that our lovely friend Tesco (who whilst not doing so well at the moment is still expecting a profit of about £1.4 billion and pays its Chief Executive £1.25 million plus benefits) uses ‘flexible working’ as an excuse to tax dodge. Now, I hadn’t realised this, but apparently if employees earn less than £153 a week – less than 24 hours of work at adult minimum wage rate – employers don’t have to pay their National Insurance contributions. This saves employers on average 14% in wages for each employee, which means millions less in tax going to the Government – so less public spending for things like schools, roads, hospitals. This has serious implications for individuals’ future pension pots too.
I don’t know about you, but I reckon this mess really needs sorting out. Massaging unemployment figures, tax dodging, and ducking the minimum wage aren’t okay – it needs stamping out now.