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

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

Low-paid and precarious work costs the government billions every year, which should be used for “cash-strapped hospitals, care homes and schools,” according to the Trade Union Congress (TUC).

TUC general secretary Frances O’Grady has called on the government to introduce the “long overdue” Employment Bill in the upcoming Queen’ Speech to tackle various forms of precarious work.

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

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

The organisation said that precarious employment practices effectively “starve” the public purse, forcing the government to spend more on social security programs to make up for shortfalls in workers’ income.

As workers on zero hours contracts and other forms of precarious employment earn significantly less than regular employees, their employers are effectively being subsidised by the taxpayer.

The TUC also points to reduced tax and National Insurance contributions as a cause of the major Treasury shortfall.

General secretary Frances O’Grady said: “Britain’s insecure work epidemic isn’t just punishing workers, it’s starving the public finances too.

“The Government’s failure to clamp down on shady employment practices is costing the Treasury a fortune every year.

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

Will the Employment Bill feature in the Queen’s Speech?

The TUC reiterated calls for an Employment Bill to be introduced which would clamp down on various forms of precarious work.

The Bill, which has long been promised by the government, is not expected to feature in the Queen’s speech this week.

Ms O’Grady said: “Ministers must stick to their word and deliver the long overdue Employment Bill.

“Leaving insecure work to flourish unchecked would be an act of betrayal.”

A Government spokesperson said: “We are committed to building a high skilled, high productivity, high wage economy that delivers on our ambition to make the UK the best place in the world to work.

“This includes ensuring workers’ rights are robustly protected while also fostering a dynamic and flexible labour market.”