Exclusive: Government 'has its head in the sand' over extent of zero hours

The Government is failing to recognise the true extent of workers employed on controversial zero-hours contracts, by continuing to use data that is acknowledged by the Office for National Statistics – which publishes the statistics – to understate the problem, according to MPs and campaigners.

The ONS had previously said 250,000 workers were on the contracts, which leave workers with no guaranteed hours each week and subject to last-minute changes in working patterns. But it has since admitted that the data undershoots the true number, and some estimates put it at as high as 1 million.

Campaigners have argued that the "head in the sand" attitude to the extent of the problem could be behind the Government's failure to take action to defend employees' rights.

Companies using zero-hours contracts include Sports Direct, McDonald's and Burger King. Despite the ONS's concerns, the Government stated in a recent answer to MPs that it continues to believe the low number is correct.

The ONS's regulator, Sir Andrew Dilnot, chairman of the UK Statistics Authority, has promised it will change the way it calculates zero-hours contracts, admitting the estimates were probably too low as individuals do not necessarily realise contracts are "zero hours". The ONS will now start polling employers instead of just workers.

The shadow Business Secretary, Chuka Umunna, said: "Ministers have their heads in the sand and are refusing to admit the huge proliferation we've seen on their watch of growing insecurity at work. Labour has recently announced plans to outlaw zero-hours contracts where they exploit people. In contrast, out-of-touch ministers have failed even to properly investigate the issue or how widespread these contracts have become."

The insistence of the Department for Business that the 250,000 number is correct is also at odds with the admission of the Government's own care minister, Norman Lamb, that there are 307,000 workers on zero-hours contracts in the care sector alone.

Vidhya Alakeson, deputy chief executive of the Resolution Foundation, which has carried out research into zero-hours contracts, said: "We have known for some time the numbers are probably far higher, so you would think the Government would admit that."

Before the summer, the ONS had claimed there were 200,000 workers on zero-hours deals, but following revelations that some high-profile businesses were using the contracts, it revised the estimate up to 250,000. However, a report by the Chartered Institute of Personnel and Development estimated that around a million workers could be on the contracts.

Labour MP Alison McGovern, said: "You have to question how seriously they would take this if they are still quoting these odd numbers. They already know how many work in the care sector, which is more than the ONS data, so you'd have to question why they can still give that response."

Labour leader Ed Miliband has already called for a ban on exploitative zero-hours contracts, while the Business Secretary, Vince Cable, said he would be looking at legislating against their misuse. Three officials were instructed to review the use of the contracts over the summer, but ministers admitted no written evidence was requested from businesses.