The New Payment Laws 2: The backlash is swift – and happening already

The Government’s new crackdown on bogus self-employment has had an immediate – and predictable – impact on the construction industry. Firms are already saying that changes to the tax and payment rules will have a major impact on labour costs.

Meanwhile, some freelance builders are already taking the law into their own hands and ‘voting with their feet’.

For example, we’ve heard of a brickie, whose parting shot was more or less as follows: “Having worked outside all winter on a scaffold, laying bricks, on pricework, out in all weathers, taking what comes, seeing the prices jump from £300 per 1,000 bricks laid to £450 per 1000 in the last year, I’ve been perfectly content. Work is good, there’s more of it about, and I was looking forward to earning more this year. But now, just when things are picking up, the taxman expects me to be taxed as an employee, simply because I’m contracted by an intermediary. So now I’m off to work on extensions for full pay, and no tax deducted at source. It’s a no brainer!”

Is this the shape of things to come? Judging from what has happened last week in West Sussex, the answer is yes. . .

Thirty-four agency electricians walked out when they discovered the new rules would mean they suffered an instant £100 a week pay cut.

Within a matter of hours, a deal had been agreed between with contractor NG Bailey to employ the electricians on a rolling three-month contract under full employment conditions.

This was seen as a triumph by trade union Unite, which commented: “It is likely this strong action in Crawley will lead to a spate of walkouts by the 200,000 agency workers throughout the UK.”

Hudson Contract Managing Director Ian Anfield comments: “It’s sad – but sadly not surprising – that Unite appears to relish widespread disruption in the industry just when work is picking up so well. The deal struck means that NG Bailey’s costs have increased overnight by twenty-two per cent.”