Grey economy growing amid Covid lockdown – Bill Jamieson

Informal, small-scale exchanges of goods and services – either in kind or for cash in hand – seem to be becoming more popular, writes Bill Jamieson

The cash-in-hand economy may be proving more attractive to some (Picture: Craig Stephen)

Few sectors have been harder hit than they ‘grey economy’ – that massive range of goods and services provided by micro businesses too small to show up in official statistics – and with a profile that manages to escape the attention of the taxman.

From small-scale furniture makers operating from their garage to fitness instructors holding exercise sessions in open spaces, many of these businesses operating in the shadows have no legal contracts of employment, benefits or insurance: there is no safety net. But this informal, grey economy looks to be expanding as the Covid-19 lockdown has opened up new demand for its services.

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Even before the pandemic struck, more than two million people worked in this below-the-radar economy, accounting for almost 14 per cent of all employment.

By its very nature, its exact size and reach is difficult to capture with any precision.

Academics explain the size and persistence of the grey economy as the product of a combination of contacts, skills, equipment and available labour.

Cash transactions – at least until Covid made us wary of plastic banknotes – appeared to dominate, together with the informal exchange of goods and services in kind.

Now it seems many who have been furloughed are taking the opportunity to augment their reduced incomes by turning hobbies into marketable products and making use of more time at home to earn some extra “on the side”.

From handymen to hairdressers, we are making use of opportunity to make ends meet. And many who were previously looked down their noses at the grey economy are finding themselves rather glad of it.

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