Angela Rayner's plans for workers' rights will force firms to slash jobs and put up prices, retail bosses warn
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Labour faces a mounting business backlash over its workers’ rights bill amid claims that the ‘deeply worrying’ proposals could force firms to slash jobs and put up prices.
In the latest sign that Government policies are stifling growth, a poll of HR directors by the British Retail Consortium (BRC) found 52 per cent will reduce staff numbers as a result of the bill. The same proportion said it would mean higher prices.
And the British Chambers of Commerce (BCC) said that with the legislation at a ‘critical stage’ in Parliament, amendments must be made to head off ‘unintended consequences that could limit employment opportunities and economic growth’.
Separate findings from the Confederation of British Industry (CBI) showed retail sales falling for a seventh month in a row. The bleak reports add to the gloom descending over the economy.
The International Monetary Fund last week downgraded its outlook for the UK as business buckles under the weight of Labour’s tax
hikes and Donald Trump’s trade war. That was followed yesterday by another downgrade by economic forecaster the EY Item Club, which also warned Rachel Reeves may have to ‘rethink’ her plans in the Autumn Budget.
Fears are mounting that the Chancellor will be forced into another round of punishing tax hikes to make her numbers add up.
Britain’s beleaguered high streets are already being battered by her £25billion National Insurance tax raid as well as a sharp increase in the minimum wage that both came into effect at the start of this month.
Now they are braced for the impact of the workers’ rights package spearheaded by Deputy Prime Minister Angela Rayner, which will introduce a fresh deluge of red tape even as Labour claims to be tackling unnecessary regulation.
The BRC found that 70 per cent of retail HR directors believed the bill would have a ‘negative or very negative impact’ on their business.
It said that the biggest concern among employers was over the proposal to establish rights to guaranteed hours, making it harder to offer part-time jobs.
BRC chief executive Helen Dickinson said: ‘Those in charge of retail hiring are clear – unless amended, the bill will make it even harder to keep and create jobs and reduce the flexibility that defines many existing retail roles.’
The BCC said planned changes to dismissal and strike rules as well as zero-hours contracts were among areas that needed to be looked at again.
Jane Gratton, deputy director of policy at the BCC, said: ‘The legislation will usher in a seismic shift in the rules governing the relationship between businesses and their staff.’
Separate CBI figures yesterday showed that retail sales fell in the year to April – though by less than the sharp decline seen in March. Companies expect the downturn to worsen in May.
CBI principal economist Martin Sartorius said: ‘Firms remain pessimistic about the outlook due to the impact of Autumn Budget measures, persistently weak consumer sentiment and global economic uncertainty.’
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