Unemployment rate lowest since 1975 but number on zero-hours contracts soars

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The UK's unemployment rate has fallen to its lowest since the summer of 1975, with a record number of people in work.

But the jobs boom has also seen a record number of workers employed on zero-hours contracts in their main job.

Workers on the controversial contracts increased by 101,000 in the last quarter of 2016 to 905,000 compared with the previous year.

The Office for National Statistics (ONS) said those on zero-hours contracts were more likely to be young, women, part-time or in full-time education.

Other figures published on Wednesday showed that unemployment fell by 31,000 in the three months to January, to 1.58 million, the lowest for a decade, giving a jobless rate of 4.7%, the lowest since the summer of 1975.

Almost 32 million people are now in work, a jump of 92,000 over the quarter and 315,000 compared with a year earlier.

The number of people on the claimant count, including Jobseeker's Allowance and those on Universal Credit required to seek work, fell by 11,300 last month to 734,700, the lowest since May 1975.

Average earnings increased by 2.2% in the year to January, down by 0.4% on the previous month.

David Freeman, senior statistician at the ONS, said: "With the unemployment rate last lower in summer 1975 and the employment rate still at a record high, the labour market remains robust.

"But smaller wage increases and higher inflation mean the growth in real earnings has slowed sharply in recent months."

A record 4.8 million people are now self-employed, up by 49,000 on the quarter and 148,000 over the past year, representing 15.1% of the total workforce.

Those classed as economically inactive, including people looking after a relative, on long-term sick leave or who have given up looking for work, fell by 34,000 to 8.8 million.

The UK's employment rate is now 74.6%, the joint highest since records began in 1971. 

Employment Minister Damian Hinds said: "I'm delighted by another set of record-breaking figures showing more people in work than ever before and unemployment falling to its lowest in 12 years.

"Employment is up, wages are up and there are more people working full-time. This is good news for hard-working families across the UK as we continue to build a country that works for everyone.

"But we have more to do, which is why we're pressing ahead with our welfare reforms to ensure that it always pays to be in work."

TUC general secretary Frances O'Grady said: "Zero-hours contracts allow bosses to treat workers like disposable labour.

"If you're on a zero-hours contract you have no guarantee of work from one day to another. Put a foot wrong and you can be let go in a heartbeat. Turn down a shift because your kid's sick and you can be left with little or no work.

"That's why employment law needs dragging law into the 21st century. Far too many workers do not have the power to challenge bad working conditions.

"Zero-hours contracts can be a nightmare to plan your life around, and are a huge drain on the public finances.

"The growth in zero-hours working over the last decade is costing the Government almost £2 billion a year."

The TUC said zero-hours contract workers earn significantly less than regular employees and so pay less tax and National Insurance and are more reliant on tax credits.