Replace zero-hours with guaranteed hours: calculation note

Central fiscal result

+£0.8bn - Net public-finance impact in 2027-28

Low case: +£0.2bn. High case: +£3.0bn. Positive numbers are fiscal costs or borrowing pressure. Negative numbers are Exchequer savings or receipts.

Scenario and baseline

• Require guaranteed-hours contracts for regular variable-hours workers, with compensation for cancelled shifts.
• Baseline is current law and published official data unless stated.
• Private business costs are excluded unless they affect tax or procurement.
• Target year is 2027-28, with later years shown separately.

Affected population

• Unit is variable-hours workers and contracts.
• ERA analysis cites about 2.4m affected workers.
• Fiscal exposure is public and commissioned services.
• Private business costs are wider than fiscal costs.

Gross impact

• ERA analysis cites 2.4m variable-hours workers.
• Official guaranteed-hours EANDCB is about £0.22bn.
• Official shift-notice/payment EANDCB is about £0.20bn.
• Central fiscal exposure scales public and commissioned-service costs.

Fiscal build-up, central case

• Public and commissioned-service pass-through: +£0.55bn
• Administration and enforcement: +£0.20bn
• Tax and NI offsets: -£0.05bn
• Tribunal pressure: +£0.10bn

Central net impact: +£0.8bn in 2027-28.

Behaviour and pass-through

• Low case assumes official ERA-style implementation.
• Central assumes stronger compensation and public pass-through.
• High case assumes broad regularity tests.
• Employers reduce some marginal shifts.
• No wellbeing saving is monetised.

Phasing

• 2026-27: +£0.2bn. Guidance and contracts.
• 2027-28: +£0.8bn. First full year.
• 2028-29: +£0.9bn. Avoidance disputes.
• 2029-30: +£1.0bn. Scheduling settles.

Main source groups

• Department for Business and Trade, "Employment Rights Act 2025 - Economic Analysis" (2026): The ERA economic analysis estimates around £1bn annual direct business cost before social-care bargaining; provides official baseline costs and affected groups.
• Department for Business and Trade, "Employment Rights Act 2025 impact assessments" (2026): The IA collection separates guaranteed hours, unfair dismissal, fire and rehire, union and equality measures; prevents treating broad rights packages as one undifferentiated pledge.
• Ministry of Justice, "Tribunal Statistics Quarterly: October to December 2025" (2026): Employment Tribunals received 13,000 single claims and had 58,000 open single cases in Q3 2025; shows enforcement capacity is already a binding risk.
• Autor, Kerr and Kugler, "Does Employment Protection Reduce Productivity?" (Economic Journal, 2007): Employment-protection changes can reduce productivity where firms face higher firing and adjustment costs; supports caution on policies that raise dismissal, scheduling or adjustment costs.
• DiNardo, Fortin and Lemieux, "Labor Market Institutions and the Distribution of Wages, 1973-1992" (Econometrica, 1996): Labour-market institutions can compress wage inequality through wage floors and bargaining power; useful for distributional channels, not for claiming free fiscal gains.
• Green Party of England and Wales, "Workers' Charter 2026" (2026): Used to define the pledge wording, policy scope and implementation scenario being modelled.