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Zero-hour contracts are ‘aiding’ economic recovery

Like the rest of Europe, Britain must ensure that there continues to be flexibility in employment so that the country can generate international investment and boost job creation – insists Rob Wall

The British government’s zero-hours employment contracts consultation, which was launched today, has recognised the important role that they play in the United Kingdom labour market. These contracts have helped to save jobs through tough economic times and have enabled businesses to respond rapidly to new opportunities over recent months.

The Confederation of British Industry’s latest employment trends survey On the up shows that almost all firms 97 per cent see flexible employment patterns, such as use of agency workers and zero-hour contracts, as either vital or important to the UK economy. On no other issue does the survey produce such unanimity of views.

Some 87 per cent of respondents said that zero-hour contracts enable companies to cope with fluctuating demand while 81 per cent stated that they helped firms respond rapidly to growth opportunities. And 65 per cent insisted that the aided staff in offering choice to those who did not want full-time work.

Businesses view the biggest current threat to flexibility and UK labour market competitiveness as the burden of employment regulation – according to 68 per cent of those surveyed. If the UK were to lose its European Union Working Time Directive opt-out, 79 per cent of firms say it would have a negative impact with 51 per cent stating that impact would be severe or significant.

The benefits are not just on the employer side either. Zero-hour contracts offer a choice to those who want flexibility in the hours they work – such as students, parents and carers – and provide a stepping-stone into the jobs market for those most vulnerable to long-term unemployment. Two thirds of respondents said flexible employment played an important role in creating opportunities for people who were unable to work full-time or did not want full-time employment.

Flexible employment is very much at the heart of job creation in the UK. And the encouraging news is that more companies expect to create jobs than not over the next 12 months – for the first time since the onset of the recession in 2008. Some 51 per cent of firms expect their staffing levels to be larger in 12 months’ time, with private sector workforces anticipated to grow across all regions – Yorkshire and Humberside and the East Midlands being the most buoyant. There are also an increasing number of opportunities for young people to find work, with companies planning to take on more graduates and apprentices.

We are starting to see the recovery have an impact on business plans to hire and it is great to see jobs being created across most regions, not just London and the South East. Our labour market performed well throughout the recession and caution on pay and flexible contracts will continue to underpin growth.

As the recovery takes hold, the UK needs to remain a place where people want to do business. We must ensure there continues to be flexibility in employment so that we can generate international investment and boost job creation. Zero-hour contracts are a big part of this.

Rob Wall is head of education and employment at the Confederation of British Industry

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