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Alexander taken to task over work scam response

Treasury Secretary angered MP with ‘complacent answer’

Labour's John Spellar vowed to call "complacent" Treasury Secretary Danny Alexander's bluff yesterday over a construction industry tax dodge now being used to steal cash from teachers and carers.

The Warley MP told the Star how a constituent working as a temp in schools had raised the alarm after being stung by his employer.

The entirely legal scam sees agencies pass people onto another firm's books - dubbed "umbrella" firms by construction union Ucatt - before "costs" and "expenses" are docked from their pay to cover employers' national insurance.

Mr Spellar tackled the leading Lib Dem on the issue in the Commons on Tuesday but was left fuming after a "complacent answer" from Mr Alexander, who denied knowledge of the scheme.

Now Mr Spellar will join the fight to close the loophole, vowing yesterday to "gather evidence from the unions and the industry" before confronting the minister.

Workers end up with huge cuts to take-home pay and the Treasury gets less tax through the set-up, which became rife in construction when the government outlawed "bogus" self-employment in April.

Mr Spellar warned Mr Alexander on Tuesday that it was now "spreading rapidly to other sectors, including supply teaching.

"What is the minister going to do about the scandal of umbrella companies?" he demanded.

But the Treasury Secretary claimed ignorance of the scandal - laid bare in a dossier by Ucatt last week - adding: "If the right honourable gentleman has evidence that he wishes to bring to my attention of specific issues that have come to his attention, I would gladly look at it."

Unions are set to mount a joint lobby of Parliament later this month to ramp up pressure on the government to act.

And Ucatt general secretary Steve Murphy, whose union has fought relentlessly to expose the issue, fumed yesterday: "This is a typical non-answer from a government who have their heads in the sand on the problem.

"Construction workers forced to work through umbrella companies are losing thousands of pounds a year and can't make ends meet.

"If Mr Alexander wants to find out about the issue he should read our report The Umbrella Company Con-Trick."


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