A drive to cut Olympic construction costs is threatening to suck in large numbers of “bogus self-employed” migrant workers, leading to widespread tax avoidance and blocked work opportunities for local people, ministers have been warned.

Alan Ritchie, general secretary of UCATT, the construction union, has written to Jane Kennedy, financial secretary to the treasury, and Paul Gray, chairman of Revenue & Customs, warning that a decision by the Olympic Delivery Authority to allow contractors to recruit self-employed workers would encourage tax abuses and reduce site safety.

Mr Ritchie said: “There is a growing fear that the ODA and the major Olympic contractors are trying to build the Olympics on the cheap, by employing large numbers of migrants workers on self-employed contracts (and) paying them far less than they would have to pay British employees.”

The union says that the industry’s self-employment tax scheme is habitually abused, with companies registering workers as self-employed when they really should be classed as directly employed. As a result, contractors did not have to pay national insurance, holiday and sick pay, and pension contributions.

The full story is available in the Financial Times.

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