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20 September 2013

Cable pledges to end zero hours contracts ‘abuses’

Call for minimum wage rise expected from business secretary

Business Secretary Vince Cable will pledge to end employer “abuses” of zero hours contracts in a speech at the Liberal Democrat conference in Glasgow this week.

The controversial contracts have repeatedly hit the headlines in the past year as critics warned they left workers with no job security or guaranteed minimum hours. However, employers who support this system of employment argue that it allows greater flexibility in workforce planning.

Cable is expected to tell delegates: “I have been examining closely the issue of zero hour contracts over the last few months. It is clear that they are much more widely used than we had previously thought. It is also clear that there are abuses in the system, especially around the issue of exclusivity which some employers are demanding from workers on these contracts.

“I am determined to make sure people are paid and treated fairly, while helping to keep people employed in these delicate economic times.”

Earlier this year, figures from the Office for National Statistics showed that the number of people working under a zero hours arrangement had grown to 200,000 between October and December 2012, up from 150,000 in the same period in 2009.

However, in August CIPD research revealed that up to one million workers are employed using this method, fours time the number previously thought meaning that 3 to 4 per cent of the country’s workforce have one.

In addition to tough scrutiny of zero hours contracts, Cable is expected to call on the Low Pay Commission to increase the minimum wage, which he said has fallen in real terms by 10 to 12 per cent since 2008.

Speaking on the subject of low wages ahead of the party conference, Cable told the Guardian: “We cannot go on for ever in a low pay and low productivity world in which all we can say to workers is ‘you have got to take a wage cut to keep your job’.

“We have got to enter into a different kind of workplace. For a very long time, five or six years, wages have been suppressed in low wage sectors. I am sending a signal that we are entering a very different environment.”

Cable said the government could reduce the financial impact of a rise in the minimum wage for employers by reducing their national insurance contributions.

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