ZERO-HOURS CONTRACT BAN COULD COST BUSINESSES UP TO £3BN YEARLY

A government impact assessment published on Wednesday estimates that outlawing zero-hours contracts could impose annual costs on businesses between £350 million and £2.9 billion, with a central baseline figure of £1.1 billion. The analysis accompanies a government consultation on proposed workplace reforms intended to guarantee minimum hours for workers. Ministers are considering whether to extend the measures to anyone working 48 hours a week, though current preference leans towards a threshold between eight and 20 hours.

The government argues the reforms will benefit millions of workers who currently face uncertainty over weekly hours and earnings. According to the assessment, workers would receive payments between £5 million and £1.2 billion through the right to compensation when shifts are cut or moved at short notice. The government's analysis claims the measures are expected to "support growth through improved worker wellbeing and engagement", and references research linking wellbeing to increased productivity. The paper notes that stress, depression and anxiety accounted for 22.1 million lost working days in 2024–25, equivalent to around £6.5 billion in lost output.

The British Retail Consortium has raised concerns about the proposals. Helen Dickinson, the organisation's chief executive, stated the estimated costs "raise serious questions" about whether the reforms will deliver value for workers, calling the expense to employers "hugely disproportionate to the benefits". She added that retailers would face additional costs updating HR and payroll systems, and said the timing "could not come at a worse time" following recent rises in employer's national insurance contributions.