Despite the fact that undeclared work is an issue for all 27 EU Member States, only rarely do Member States learn from what other countries have done.

This is one of the conclusions of Eurofound’s latest report on the issue, Measures to tackle undeclared work in the European Union.

The report, which is intended to help social policymakers steer debate and improve policy decisions on tackling undeclared work across the Union, argues that the issue is not the same everywhere. This is particularly the case concerning the types of undeclared work, its sectoral distribution and the motives for engaging in it. Therefore, a ‘one-size-fits-all’ approach to the issue is not appropriate. Along with the report, a ‘knowledge bank’ of more than 80 examples of good practice from across the EU has been published on-line, in order to boost opportunities for the mutual exchange of experience and learning.

When targeting undeclared work, governments can essentially choose to adopt either a ’stick’ or deterrence approach (detecting and punishing undeclared work) or a ‘carrot’ or enabling approach (encouraging compliance and the transfer to declared work).

Deterrent measures usually seek to increase the actual or perceived risk of getting caught and making it more costly, by raising fines or other sanctions.

The enabling approach focuses on making it easier for undeclared workers and their clients to comply with the rules and to make the transition to the formal economy; such approaches may also seek to ensure that individuals and businesses do not start out using undeclared work from the outset.

In addition, some countries have started to focus on changing attitudes by raising awareness of the dangers of undeclared work and its cost to society, as well as encouraging better adherence to ‘tax morality’.

The report advocates tailor-made approaches, rather than ‘one-size-fits-all’ solutions.

Because of the variation in undeclared work, a policy measure that is successful in one country or region may not work as well in another. Choosing the best policy tool is also made more difficult by the fact that formal evaluation of measures is often lacking.

To go some way towards remedying this, the database of good practice provides a short assessment of the effectiveness and transferability of every measure described. However, as the report concludes, different policy measures must be combined in an effective way if the fight against undeclared work is to be won.

The report is here.

It is a well thought out piece and should be looked at very closely in our own situation here in Wales as well as the UK. Using a more enabling strategy could pay dividends for many of the excluded groups existing in the “black economy”