Builders were put on a blacklist.
The list was shared between between the major construction firms and people named on it would be turned down for work.
The scheme came to light only when officials from the Information Commissioner's Office, an official watchdog, raided the office in Droitwich, Worestershire, which had been used to store the list.
Around 40 construction firms, including some at Taylor Woodrow, Laing O'Rourke and Balfour Beatty, paid PS3,000 a year for the right to access the list, which contained the names of 3,213 workers.
The list included details of their supposed shortcomings. For example, one construction worker was described as showing "signs of militancy over safety", while another was named "as a shop steward and member of the Transport and General Workers Union" and a possible Communist.
It was administered by a business called The Consulting Association, based in Droitwich. The firm's chief executive, Ian Kerr, was fined PS5,000 following the raid in 2009.
MPs have now launched a consultation into whether the victims of the blacklist should be entitled to compensation. Although the list, which operated for 16 years, was not illegal when it was first created, it was always "morally indefensible", according to the Scottish Affairs Committee, which has been conducting the inquiry.
The MPs published figures showing the number of people blacklisted by local authority. They include 33 people in Birmingham, six in Dudley, seven in Walsall, two in Solihull, 11 in Wolverhampton, two in Sandwell, three in Coventry and one in Warwickshire.