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The Chancellor of the Exchequer criticizes Labour’s plan to ban zero-hours contracts

Planning Ahead: The New Deal for Working People was edited by Angela Rayner

Finance Minister Gareth Davies has criticized Labour’s plan to ban zero-hours contracts.

“These contracts are used by employees because they give them flexibility in the way they work,” Davies told the Mail.

“We need to find the right balance between ensuring that workers have rights, but we also need to ensure that companies can be agile.”

Under Labour’s New Deal for Working People, drawn up by deputy leader Angela Rayner, zero-hours contracts would be banned, new workers would have full rights from day one and the practice of firing and rehiring would be made illegal.

Leader Sir Keir Starmer has pledged to introduce the deal for workers within 100 days of taking office, a move popular with the party’s trade unionists.

But Davies disagrees with the implication that corporations are inherently exploitative. “Most business owners treat their staff impeccably because the happier colleagues are, the better businesses are and the better service customers get,” he said.

The Chancellor’s comments were made during a visit to hospitality start-up Chai Guys Bakehouse in west London.

The visit would coincide with the increase in the VAT threshold from £85,000 to £90,000 from today and the extension of the 75 per cent business rates relief for small retail, hospitality and leisure businesses.

Davies, a former City fund manager at Columbia Threadneedle, indicated that Chancellor Jeremy Hunt would use the annual Mansion House address in July to continue his efforts to unlock start-up funds for technology companies.

“Every time the Labor Party leaves office there is higher unemployment,” Davies added. ‘We attach greater importance to creating employment opportunities.’

The minister declined to say whether the Treasury could abolish stamp duty on share trading to restore confidence in London’s listed companies. “It’s about having a tax environment that supports growth and a stable regime.”