TUC Congress: Balls pledge over scams in building industry

Shadow chancellor Ed Balls: "Contractual arrangements should not be arranged to avoid tax"

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Labour is promising to tackle the problem of "bogus self-employment" in the building industry.

Shadow chancellor Ed Balls argued "distorted" contracts, where employees are falsely described as "self-employed", are undermining safety.

In a speech to the TUC Congress in Brighton, he pledged to look for a "better way forward" on the issue.

Frances O'Grady, set to become the TUC's first female general secretary, also addressed delegates.

The issue of wages has dominated the conference, with unions voting unanimously on Tuesday to back co-ordinated strike action against public sector pay freezes.

The unions, who provide most of the funding for Labour, are urging the party to support them.

But Labour leader Ed Miliband, speaking to union bosses at the conference on Monday night, said neither the public nor union members wanted to see strike action.

"The way to sort out the problems the country faces is for the government to understand why working people are so unhappy," he said.

Heckling

Mr Balls was attempting to recreate a sense of harmony that was disrupted last year when Mr Miliband, who won widespread union backing when he stood for leader in 2010, warned against strikes.

The shadow chancellor said: "On the issue of bogus self-employment, in the construction sector and more widely, I am 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. It's not fair to taxpayers. And it's not fair to your members either."

Mr Balls said he had asked shadow Treasury minister Rachel Reeves "to look again" at the issue "to see if there is a better and fairer way forward".

He added: "Construction is one of our most important industries. Let's work together to make it stronger, safer and fairer for the future."

But Mr Balls faced heckles when he took questions after his speech. Liz Cameron, an activist from Unison, asked: "Why is it we hear you saying you support this Tory pay freeze?"

Mr Balls said "in order to avoid as far as possible wholesale compulsory redundancies, we have to continue with pay restraint... let's put jobs first, it is the best way for us to win the public argument".

Another delegate said she was "extremely disappointed" by Mr Balls' answer and two activists shouted "shame on you" as Mr Balls returned to the issue in a later answer.

Later in the day, Ms O'Grady, the first female general secretary in the TUC's 144-year history, pledged to "reach out, campaign and fight back more" to support workers and families struggling with the cost of living and job insecurity.

She is set to replace Brendan Barber, who retires at the end of this year.

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