Cheap, and Far from Free: The Migrant Army Building

Britain

Job restrictions have left Romanian and Bulgarian construction workers underpaid and vulnerable to exploitation, a BIRN investigation reveals.

By Sorana Stanescu in London and Bucharest

The men gather in the shadow of the Wickes hardware store, looking out for the odd jobs that keep them in the UK and for the police that periodically moves them along.

As day labourers on the margins of Britain’s sprawling construction sector, they provide a ready supply of cheap manpower, useful yet often unwelcome. Their presence provokes frequent complaints from the residents of Seven Sisters, a north London neighbourhood where the cafés offer a greasy “builder’s breakfast” for less than five pounds.

With no offices or agencies supporting them, the day labourers crowd the pavement and advertise their trade through their attire – grubby tracksuits spattered with paint and plaster.

When potential clients pull up, they haggle over rates and hitch rides. When the police show up, they run.

Across the road on a sunny July morning, Jarek collects his groceries and stops for a chat with some friends.

“Illegal people,” is how he describes the 30 or so men waiting outside Wickes. Like them, Jarek is an immigrant. Unlike them, he comes from Poland and does not panic when he sees the police.

He too is a builder, but he does not do business on the pavement outside Wickes. Instead, he travels on a moped fitted with a toolbox, dispensing glossy flyers advertising “cheap and reliable contractor services” in ungrammatical English.

Jarek is one of around a million workers who moved to the UK as a result of the EU’s expansion into Eastern Europe in 2004. The scale of the migration, most of it from Poland, prompted a backlash against the British politicians who had failed to anticipate it.

The day labourers are mostly Romanians and Bulgarians, and relative newcomers to the UK. They arrived after 2007, when Romania and Bulgaria –the so-called A2 countries – joined the EU.

Despite Jarek’s suspicions, the men’s presence in Britain, or indeed outside Wickes, is not in itself illegal. All that separates him from the newcomers is a web of restrictions, designed to deny A2 migrants the many advantages that helped Jarek and his compatriots establish themselves in the UK.

Free to stay but not free to work, the Romanians and Bulgarians fulfil a narrow function – meeting Britain’s need for underpaid and unprotected labour.

Nervous and suspicious

The construction sector accounts for more than 10 per cent of Britain’s GDP. It is the centrepiece of the government’s plan to revive the struggling economy, and the recipient of regular subsidies and stimuli. Critics say the government’s restrictions on A2 workers have benefitted the construction sector by boosting the ranks of poorly paid and loosely regulated labourers. They accuse Britain of trying to build its way out of a double-dip recession by undercutting pay and conditions for other, relatively wellestablished, workers.

A Balkan Investigative Reporting Network (BIRN) investigation shows that A2 workers are generally prepared to work for lower wages and in worse conditions than others in the construction industry. Many interviewees spoke on condition of anonymity because they did not wish to attract the attention of the authorities.

Unions and safety officials agree that the A2 workers’ immigration status has driven them into the highly casual end of the building trade, where procedures are more likely to be ignored and injuries and grievances are less likely to be reported.

The UK government justifies its restrictions, arguing that they have protected the British workforce by preventing another surge of immigration of the scale that brought Jarek to the country.

Statistics from the Department of Work and Pensions show that around 210,000 Romanians and Bulgarians have received a National Insurance (NI) number since their countries joined the EU five years ago. This figure offers a very rough indication of how many migrants from these countries may be working in Britain, without taking into account those working illegally and those who have since returned home.

By comparison, some 640,000 Poles have received NI numbers over the last five years, from the total of more than a million over the last decade.

Large construction guilds, meanwhile, insist that their members are bound by law to ensure working conditions are safe and fair. When the rules are broken, they say, the migrants are often complicit.

Some migrants interviewed by BIRN seemed to confirm this, saying they worked in the grey economy to avoid taxes. But as many are underpaid, the incentive for doing so is also greater.

If caught working illegally, the migrants face a fine of up to £1,000 pounds (about €1,300) and a possible prison term.

However, the day labourers in front of Wickes are in little danger of being busted, as they can always claim that they intend to declare any earnings.

Their nervousness around the police stems less from a genuine fear of prosecution than from a general suspicion of the state. Facing severe restrictions in the job market, they have been funnelled towards a zone where there is no clear distinction between the lawful and unlawful, or between the exploitative and the cost-effective.

“The police have asked me for ID… Sometimes they say you can stay, sometimes they make you leave,’’ says a middle-aged day labourer from Bulgaria who gave his name as Neven. “I stay,’’ he adds. “What are the police going to do to me?’’

Numbers game

Upon arrival in the UK, all foreigners in search of work are expected to applyfor an NI number. The number is a prerequisite for anyone seeking legitimate long-term employment. It is effectively the code upon which the state builds each individual’s record of taxes, pensions and benefits.

When Jarek came to Britain in 2004, Poles like him had little difficulty acquiring an NI number. But by the time Neven migrated five years later, Romanians and Bulgarians were finding it harder to register.

A2 nationals are automatically allocated NI numbers only if they have travelled to Britain on a type of work permit that is issued with direct offers of employment.

However, these migrants are in a minority. Most Romanians and Bulgarians travel to the UK without work permits or any firm promise of employment. Eager to start earning, they gravitate towards the construction and hospitality sectors, where they can eventually skirt the need for a work permit by registering as self-employed.

Migrants who fail to prove they are self-employed, and therefore fail to get anNI number, often end up on the margins of these sectors, getting paid cash-in hand for casual jobs that require minimal paperwork.

Bulgarian and Romanian embassy officials in London told BIRN that their citizens were finding it harder to get an NI number, in some cases logging five unsuccessful attempts. Many of the day labourers outside the Wickes at Seven Sisters fit this category.

“No money, no job in Bulgaria,” said a 45-year-old migrant who did not give his name. He said he had twice applied for an NI number, and had been refused both times. He had not found work for two months and was living off his savings.

‘Smaller sites, bigger risks’

Undocumented workers are more likely to be seriously injured on the job, according to trade unions and safety experts.

A young Romanian man, whose name has been withheld on the advice of his lawyer, told BIRN he had been electrocuted while operating a jackhammer at a site in London. “I don’t remember much,” he said. “There was smoke. My arm was burned.”

The man had been working in Britain without an NI number and had learned about the job from a friend. He says he was not asked to provide any documents or sign any contracts before starting work, and was paid cash-inhand. Although he received some basic safety instructions, he says he had trouble following them because of his poor English.

Construction unions estimate that some 80 per cent of workplace accidents go unreported. The Health and Safety Executive (HSE), the UK watchdog that monitors safety in the workplace, does not keep any data recording the nationality of injured workers.

However, it acknowledges that migrant workers are more exposed to accidents and less likely to report them, even though they cannot be deported or penalised for doing so.

Richard Boland, the HSE’s head of operations for construction in southern England, says “the vulnerability that comes with having restrictions on when and where you can work” can drive builders to sites where the safety rules are not enforced.

HSE’s inspectors are now shifting their focus away from the large firms towards smaller sites because the latter, he says, are more likely to ignore standards and to employ relatively inexperienced migrant workers.

‘Silent accidents’

Romanian and Bulgarian workers who manage to acquire an NI number still face curbs that did not trouble an earlier generation of immigrants from the EU.

Most jobs in construction are arranged through specialist employment agencies, which are typically small companies with a record for hiring from within a particular immigrant community.

These agencies act as subcontractors for bigger firms, delivering casual labour to large sites at short notice and handling much of the associated paperwork.

According to lawyers and labour experts, the A2 workers hired by such agencies are less likely to complain of dangerous conditions and low wages. Many fear being blacklisted in an economy where their options for employment are already circumscribed.

Remus Robu, a paralegal with UK law firm Levenes, often handles claims arising from accidents involving A2 workers. “Unfortunately, there are people who do lose their job when they file for compensation,” he said.

The Romanian owner of a small building company, speaking on condition of anonymity, confirmed the existence of an informal blacklist for workers who were regarded as troublesome. But, he said, this was no different to the system of references shared by employers in other industries.

“Would you hire back somebody who had filed a claim against you?’’ he said.

The owner also told BIRN that he had persuaded a worker against reporting an accident that had led to a broken leg. He said he had paid the injured man a full wage throughout his time in recovery, and guaranteed him further employment when he was fit again.

“He agreed not to pursue a claim against me because I have a good relationship with my workers,” the owner said.

According to the HSE, any accident that leads to a broken leg has to be reported under UK law. If an employer is found to be at fault, lawyers say a worker can expect to receive between £6,000 and £36,000, depending on the severity of the injury. Small construction firms are usually keen to avoid having claims brought against them, as these can hamper their ability to secure fresh contracts.

‘Informal economy’

As well as discouraging complaints over conditions, employment agencies often pay A2 migrants a lower wage than other workers.

Many agencies deduct a form of commission from workers’ pay packets. In some cases, a payroll company – often linked to the agency – will charge an additional “admin” fee for processing salaries. The A2 migrants have no safeguards against these cuts to their earnings. As self-employed workers, they are not eligible for the UK’s minimum wage, currently set at just over six pounds an hour. Moreover, although technically expected to pay their own taxes, self-employed labourers are automatically taxed at source at a rate of 20 per cent, under a government scheme that applies to the construction sector alone.

The construction workers’ union, UCATT, has called for the scheme to be scrapped, saying it facilitates a form of bogus self-employment. Britain’s opposition Labour party also recently said it would review the scheme.

However, an official from the UK’s largest construction trade association said the workers in this category deserved no more sympathy than their employers for undermining their “legitimate competitors”.

“Both parties gain from effectively breaking the law and, as such, those A2s who collude in false self-employment cannot be portrayed as innocent victims,” says Peter O’ Connell, a policy manager with the Federation of Master Builders.

Stephen Ratcliffe, director of the UK Contractors Groups, a guild representing the country’s top construction firms, said criminal proceedings should be used against the “informal economy” where companies flout tax, employment and safety laws. Both O’Connell and Ratcliffe stressed that the members of their organisations abide fully by the law.

The UK’s main trade body for employment agencies, the Recruitment and Employment Confederation, declined to comment despite several requests from BIRN.

Given the ways in which working through employment agencies can eat into their earnings, many A2 workers decide to opt out of the system. 

The day labourers outside the Wickes superstore in Seven Sisters include some who have an NI number but choose not to use it.

A Romanian man, who refused to give his name, says he has been in the UK for six years and regularly pays his taxes and contributions to the state. But he supplements his official income by working cash-in-hand. “People hire me to paint their house. If they ask for an invoice, I can issue one. Otherwise, I don’t.” “I’m done working with the agencies,” he adds. “They take too much of your money.”

Most of the men outside Wickes said they expected to earn around £50 (€60) a day. By comparison, a self-employed Romanian – recruited legally through an employment agency for marshalling traffic at a building site – can expect to earn £80 (€100) per day. In other words, he will be paid only £30 (€40) more than the day labourers, out of which he must fund further tax and NI contributions.

Recruitment agencies say they pay the same wage, regardless of nationality. However, unions say that British and Polish workers can expect to be paid £9- 10 per hour for jobs that will be offered to A2 workers for £5-6 per hour.

As they do not face any working restrictions, Polish and British workers are in a better position to negotiate their rates or simply take better jobs in other sectors. Romanians and Bulgarians are more likely to go with what they are offered, as they have fewer options on the job market.

‘Good for business’

According to its critics, the current policy on A2 workers has created a system that deprives the state of tax revenues, undercuts British labour and leaves foreigners open to exploitation.

Labour MP Jim Sheridan has argued for tighter regulation of the employment agencies in the construction sector, along the lines of the licensing of agricultural gangmasters.

Others call for reducing self-employment in the sector by making construction firms hire more workers directly. However, this would also shift the burden for NI contributions – nearly 14 per cent of the wage bill – on to the employers.

UCATT convenor Dave Allen admits this is unlikely to happen, as it would leave the big firms with smaller budgets. “The government knows that if everybody was directly employed, the economy might suffer,” he says.

Bridget Anderson, deputy director and senior research fellow at Oxford University’s migration think-tank COMPAS, says the government should, at the very least, enforce the minimum wage regulations on all workers, British and foreign, self-employed or not.

She says the rhetoric about protecting British jobs was misleading: the curbs had undermined established labourers while giving businesses a more pliant workforce.

“The more you focus on immigration control, the more you introduce transitional arrangements – the more you create a labour force that is actually more desirable for employers,” she said.

EU members cannot prevent the citizens of other member states from travelling to their countries for work. They can only impose “transitional controls” of the kind currently in place in the UK against Romanians and Bulgarians.

The UK is just one of several EU states that have imposed restrictions on A2 workers. Similar restrictions exist in Austria, Germany, Belgium, France and the Netherlands.

By law, the curbs must be lifted by January 2014. However, a statement issued by the UK Border Agency last year confirmed it would apply similar “transitional restrictions” on all new EU member states to ensure that “migration benefits the UK and does not adversely impact our labour market’’.

The UK’s Border Agency, the immigration minister, and the Department for Work and Pensions all declined to be interviewed for this article.

 

Sorana Stanescu is a Bucharest-based journalist. This article was edited by Neil Arun. It was produced as part of the Balkan Fellowship for Journalistic Excellence, an initiative of the Robert Bosch Stiftung and ERSTE Foundation, in cooperation with the Balkan Investigative Reporting Network.

 

BOX ONE 

NATIONAL INSURANCE NUMBERS

A National Insurance (NI) number keeps a record of each individual’s tax and insurance contributions. British citizens automatically receive an NI number when they turn 16. Polish migrants often had to provide little more than an original ID and proof of a UK address to qualify for one. Romanians and Bulgarians who need to register as self-employed to get the number must provide contracts, invoices, job offers and references from clients. They have a three-month grace period upon arrival in which to amass this proof.

Many complain that this creates a Catch-22 situation. They cannot get the proof for an NI number until they are established as self-employed – but they cannot establish themselves as self-employed without the number.

BOX TWO

A2 WORKERS’ STORIES: WITHOUT NI NUMBER

“I tell my clients from the beginning I don’t take cheques and I don’t give invoices. Take it or leave it. I can earn up to £3,000 a month.” (“Ion”, Romania)

“I share a room with my mother for £100 a week. I come to look for work at Wickes because I have to pay the rent. If I don’t pay every week, they will simply kick me out.” (Ergean, Romania)

“I don’t have any documents and I’ve never worked with a company. Instead of finding work through an agency that will charge £40 per week, I’d rather wait outside Wickes and hope to get £80 on a good day.