'A hammer blow to young people': Businesses fume at proposed zero hours reforms

Retailers have warned that a ban on zero-hours contracts risks inflicting a "hammer blow to young people's job prospects" after the government's own analysis found the move could cost businesses billions of pounds a year.

Youth unemployment is already at its highest level in more than a decade, and Andy Burnham has made getting more youngsters into work or training one of his first priorities as prime minister.

Ministers argue their proposed reforms will help millions of workers who face uncertainty over their weekly hours and earnings and even support economic growth because it will improve employee "wellbeing and engagement".

But Helen Dickinson, chief executive of the British Retail Consortium, said they will only serve to add more strain on businesses still reeling from the government's decision to raise employers' national insurance contributions.

She warned: "Adding further costs when youth unemployment is soaring risks being a hammer blow to young people's job prospects, at precisely the time businesses across the country need to be creating more opportunities."

Ms Dickinson's concerns were echoed by Kate Shoesmith from the British Chambers of Commerce, saying: "We are already facing a youth unemployment crisis – now is not the time to make it even more costly for employers to hire."

UKHospitality chairwoman Kate Nicholls said the government should instead be seeking ways to "reduce the cost of employing people", and that young people would be most impacted by a zero-hours contracts ban.

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Reforms 'will give workers greater security'

According to the government's impact assessment published yesterday, the direct cost to employers of a ban may be between £350m and £2.9bn per year.

It is consulting on whether to apply the policy to anyone working 48 hours a week, but its preference is for it to be between eight and 20 hours.

The proposals would mean workers get payments of between £5m and £1.2bn because of the right to payments for shifts getting cut or moved at short notice.

A government spokesperson maintained it was "absolutely committed to ending exploitative zero-hours contracts".

"These reforms will give workers in every postcode greater income security and predictability of hours," they added.

The proposals have been welcomed by the Trades Union Congress, which accused critics of "scaremongering".

"These are common-sense reforms, which bring us closer to the European mainstream," it said.

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