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New zero-hours contract figures due Zero hours contracts - a work in progress
(about 14 hours later)
The Office for National Statistics will reveal the number of UK zero-hours contracts on Wednesday at 09:30 BST. There was excitement among the national statisticians at their news conference in Westminster.
Zero-hours contracts do not guarantee a minimum number of hours of employment. It's not every day you get to unveil a completely new series, especially not in as politically charged an area as zero-hours contracts.
Last year, Business Secretary Vince Cable ruled out a complete ban on the contracts, because they offer employers "welcome flexibility". These figures are, like the GDP figures we had earlier in the week, a preliminary estimate.
Last week, Labour leader Ed Miliband said zero hours contracts had "spread like an epidemic" and said he planned to crack down on them. The Office for National Statistics (ONS) estimates that employers in the UK held 1.4 million contracts that did not guarantee a minimum number of hours, but on which some work was done in the two weeks beginning on 20 January.
Meanwhile, a government spokesman said it was analysing research on zero-hours contracts and would "respond in due course". It's a little hard to reconcile that with the previous figures that the ONS released.
The trouble is that we have a fairly limited idea of how many people have zero-hours contracts. It asked people if they were predominantly employed on a zero-hours basis as part of the Labour Force Survey and came up with a figure of 583,000 for October to December 2013.
Several groups have tried to come up with estimates in the past.
The Office for National Statistics (ONS) itself asked people if they were predominantly employed on a zero-hours basis as part of the Labour Force Survey and came up with a figure of 583,000 for October to December 2013, which was just under 2% of the workforce.
But there were extensive caveats behind that figure, because there was considerable doubt about whether respondents knew what a zero-hours contract was.But there were extensive caveats behind that figure, because there was considerable doubt about whether respondents knew what a zero-hours contract was.
The figure had jumped from 250,000 six months before, which the ONS suggested was because more people knew about the contracts as a result of "increased media coverage in the latter half of 2013".The figure had jumped from 250,000 six months before, which the ONS suggested was because more people knew about the contracts as a result of "increased media coverage in the latter half of 2013".
The Chartered Institute of Personnel and Development (CIPD), which is the industry body for human resources, worked out that about one million people in the UK could be on zero-hours contracts, based on a survey of 1,000 employers. The difference between the 583,000 figure and the 1.4 million may be because people have more than one zero-hours contract each, or because they have a zero-hours contract in addition to a contract that does specify minimum hours.
The union Unite surveyed 5,000 of its members and found that 22% of them were on zero-hours contracts. It concluded that 5.5 million people were on such contracts in the UK. Even so, it's fair to say that the new figure looks pretty big. In addition to the 1.4 million contracts on which some work was done at the end of January, there are another 1.3 million contracts on which no work was done.
The ONS agrees that asking employers is a good way to find out about contracts. Its figures due on Wednesday will be based on a survey of 5,000 businesses. That may be because no work was offered during the period, but it may also be because the worker was sick or on holiday at the time, or indeed because they had gone and got another job and not bothered to cancel the zero-hours contract.
The headline figure will be the number of zero-hours contracts on which some work was done in a two-week period from 20 January. And here is the problem - there is no limit to the number of such contracts that a business can give out at minimal cost or that an employee can hold, as long as there is no exclusivity in the contract.
That's a useful indicator, because there is theoretically no limit on the number of inactive zero-hours contracts that a business can hold. The ONS has said it's going to do more research and find out how many of the 1.3 million contracts are active and should be added to the 1.4 million.
The ONS will also put out figures for the number of contracts on which no work was done in the two-week period, but that is less relevant. On top of that, it turns out that some of the biggest users of such contracts are seasonal businesses such as tourism, so the figure, next time it's collected in the summer, may be considerably higher.
Clearly, even the headline figure has limitations, because one person could have more than one active zero-hours contract, so the ONS advises that its new figure should be considered alongside the 583,000 figure from the Labour Force Survey. So it's a first go, and we now know that there are somewhere between 583,000 and 2.7 million people in the UK with contracts that do not guarantee them a minimum number of working hours.
There will also be a breakdown of the sectors in which these contracts are used, as well as more from the Labour Force Survey on the age groups and gender of people on them and whether they are also in education. If that looks like a big range, I dare say it will improve with more research. There are due to be extra questions in the Labour Force Survey from January next year, to try to find out how many people have several contracts.
So we should expect to end the day with greater understanding of how widespread zero-hours contracts are. But there are definitely things we now know about such contracts and the people who hold them that we didn't know before.
And this is work in progress from the ONS, so we should also find out how they plan to get a clearer picture in the future. Compared with the average member of the workforce, people on zero hours contracts are:
So it's a good first effort, we've learned a lot, and we can look forward to more detail when the methodology has been refined.