Labour’s ‘chaotic’ zero-hour crackdown could cost firms £3bn per year
Labour’s ‘chaotic’ crackdown on zero-hour contracts could cost businesses nearly £3bn every year, though firms have warned the real cost could spiral even higher. The cost of the new rules, which include offering guaranteed-hour contracts to flexible employees and paying workers for cancelled shifts, has been revealed in a government impact assessment. The reforms could [...]
A government impact assessment has revealed that Labour's crackdown on zero-hour contracts could cost British businesses nearly £3 billion annually. The reforms include offering guaranteed-hour contracts to flexible workers and compensating them for cancelled shifts. These measures could cost firms up to £2.9 billion per year, but the economic benefits of these policies are expected to offset most of the costs, resulting in a net average cost ranging from £300 million to £1.4 billion.
The right to guaranteed hours alone could cost businesses as much as £450 million annually, while the right to reasonable notice of shifts and the requirement for employers to pay for short-notice cancellations could amount to £1.2 billion and £1.3 billion respectively. The government's conservative "central" costing scenario estimates these new rules at £270 million, £640 million, and £160 million, summing up to a potential yearly cost of £1.1 billion.
However, the social value of these workers' rights is estimated to carry a net cost of up to £1.4 billion in the high-end scenario and £800 million in the central case. The Federation of Small Business has criticized the government for its "chaotic" approach to employment reform, warning that it could lead to "same old unemployment" similar to that of the previous administration.
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