Zero-hours contracts should be renamed 'flexible-hours contracts' and are good for workers’ “work-life balance”, Iain Duncan Smith has argued.

The work and pensions secretary said the contracts, which allow employers to summarily tell workers how many hours they can work on any given day, were subject to “scare stories” originating from Labour.

“Zero hour contracts are badly named – I don’t know whoever came up with that idea, they should be named the flexible hours contracts,” he told Sky News this morning.

Mr Duncan Smith appeared to suggest that the contracts provided adequate employment – at an average of 25 hours a week – and that although this was not full-time, they helped people keep a good “work-life balance”.

“The people who actually use that contract are for the most part people with caring responsibilities, students, people who can’t guarantee fixed hours over a series of weeks and who are able therefore to flex their work and take their work as necessary,” he said.

“We know two things people with these zero hours contracts: we know that people who do them are more satisfied with their work-life balance, interestingly enough, and we know that people who do them are not working tiny numbers, it’s actually 25 hours a week.”

“The media and others have got this completely wrong,” he added, before noting that “only” 2% of the population were on the contracts, a total of 697,000 people.

Zero-hours contracts: An innovation that's here to stay? Show all 1 1 /1 Zero-hours contracts: An innovation that's here to stay? Zero-hours contracts: An innovation that's here to stay? Zero-hours contracts (Maximise window for full graphic)

Labour says they would give zero-hours employees the power to ask for a full contract if they worked regular hours for three months.

The Green Party says it wants to emulate the German contract system where a quarter of the hours in a contract can be flexible but that employers have to give workers a base number of hours.

Mr Duncan Smith's claim that 25 hours a week is adequate employment is despite his new Universal Credit programme sanctioning people working less than 35 hours a week.

He also noted that the Coalition had introduced a provision to prevent employers from including exclusivity clauses in the contracts.

“We’ve actually changed that and I think therefore this is good,” he said.

However, because of the nature of the contracts, the Coalition’s reform does not prevent employers from simply refusing to give workers any hours if they work for another employer.

The 2% figure given by Mr Duncan Smith for the contracts is for the economy as a whole; recent increases in employment have seen substantial rises in zero hour contracts as a proportion of jobs created.

Rachel Reeves, Labour’s shadow work and pensions secretary, said: “Iain Duncan Smith’s comment shows again how completely out of touch David Cameron’s Tories are with the lives of working people. We don’t need to rename exploitative zero-hours contracts, we need to ban them."

TUC General Secretary Frances O’Grady said: “Whatever you call a zero-hours contract it is still a recipe for insecurity and exploitation, where the boss holds all the power.

“If you put lipstick on a pig, it is still a pig. But as ‘zero-hours contracts’ is a bit of a mouthful, perhaps we could call them ‘IDS jobs’ in the future.”