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Labour promises repairs VAT cut and self-employment crackdown

Shadow chancellor Ed Balls has pledged to clamp down on bogus self-employment in construction, and to cut VAT to 5 per cent for one year on home improvements, repair and maintenance.

Speaking at the Trades Union Conference in Brighton, he promised “an immediate one-year cut in VAT to 5 per cent on home improvements, repairs and maintenance to help home-owners and boost construction”.

The federation has been campaigning for such a VAT reduction.

And on bogus self-employment in construction and more broadly, Mr Balls pledged that he was “determined that we look at this issue again”.

“There is a careful balance to be struck. I do not want in any way to undermine genuine self-employment.

“But nor should contractual arrangements be distorted and misrepresented to avoid tax and undermine terms and conditions.”

‘Bogus’ or ‘false’ self-employment occurs when workers are classified as self-employed, despite having characteristics of an employee, and as such are denied benefits such as sick pay, adequate notice periods and pensions.

“It’s not fair to taxpayers”, he continued, “and it’s not fair to your [TUC] members either”.

The shadow chancellor added that he had asked shadow chief secretary Rachel Reeves to consult employers and UCATT on proposals for reform, “to see if there is a better and fairer way forward”.

“Construction is one of our most important industries. Let’s work together to make it stronger, safer, and fairer for the future.”

Steve Murphy, general secretary of construction union UCATT, welcomed the initiative: “Labour is listening to ordinary construction workers and ourselves. There is a growing understanding that bogus self-employment is not simply about a loss of revenue to the Treasury but it also strips workers of even the most basic employment rights.

“It is vital that Labour’s review is the first step in a long-term solution for the construction industry. Bogus self-employment corrupts the entire industry, creating a short-termist hire and fire culture which among many other problems reduces safety and deters vitally needed apprenticeship training.”

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