O’Grady: Explosion of zero hours contracts costs the government almost £2bn

Workers are treated as disposable under zero hour contracts, Frances O’Grady warned today, as the TUC published new research suggesting the growth in the “no strings” deals cost taxpayers around £2bn a year.

O’Grady, general secretary of the TUC, said workers on zero hours contract earn one third less per hour than the average employee.

People on zero hours cost the exchequer nearly £1.9bn a year, with the number of workers using the contracts increasing 13 per cent over the past twelve months to 905,000. The cost to the government is due to workers earning less, so contributing less in taxation and national insurance, and also from their greater reliance on tax credits, according to a TUC analysis of ONS data.

O’Grady warned: “If you’re on a zero-hours contract you have no guarantee of work from one day to another. Put a foot wrong and you can be let go in a heartbeat. Turn down a shift because your kid’s sick and you can be left with little or no work.”

“That’s why employment law needs dragging law into the 21st century. Far too many workers do not have the power to challenge bad working conditions,” she added.

“Zero-hours contracts can be a nightmare to plan your life around. And are a huge drain on the public finances.”

“The growth in zero-hours working over the last decade is costing the government almost £2bn a year.”