Business guru’s stark warning to Labour over planned reforms of workers’ rights

THE head of a leading business group has sounded the alarm over Angela Rayner’s flagship plans to reform workers’ rights.

Shevaun Haviland, director general of the British Chambers of Commerce (BCC), urged Labour not to rush into the changes if it wins the next election. ‘To protect jobs and the economy, any changes to legislation must be proportionate, affordable, allowing time for business to prepare and be accompanied by robust guidance and support,’ she said, adding that firms were already facing mounting cost pressures and needed ‘room to breathe’.

It follows a chorus of concern from business leaders about the plans – fronted by Labour’s under-fire deputy leader Ms Rayner – which would see workers given rights from day one in new jobs as well as a crackdown on zero-hours contracts. Labour’s policies would also see it abolish all trade union reforms enacted since 2010, when it was last in power, and scrap Tory moves to restrict workers from going on strike.

Ms Haviland’s comments came as a BCC survey warned the UK is trapped in a ‘low to no growth state’. It found that firms remain optimistic about the year ahead but they have seen little improvement in business conditions so far in 2024. That underlined the need for politicians to get behind innovation and investment, the BCC said.

Ms Haviland said reforms announced so far to planning laws and tax ‘haven’t yet shifted the dial’, while a rise in the minimum wage was adding to the ‘very high’ wage cost pressures that businesses already face. She added: ‘Firms need room to breathe as they strive to pay staff fairly. In this election year it’s vital that politicians remain laser-focused on helping businesses invest, develop and grow.’

Labour’s plans have already drawn fire from party grandee Lord Mandelson — architect of New Labour’s 1997 landslide — who has urged the leadership to tread carefully to avoid hurting British businesses. He used a recent newspaper article to call for caution, saying any reform ‘must not be rushed but it must be done in consultation with business’.

Ms Rayner has, however, hit back at such ‘squealing’ and insisted the private sector would be on board with her changes.

But Sir Martin Sorrell, chief executive of S4Capital, told the Mail that former business secretary Mandelson was ‘ dead right’ and that the issue was ‘Labour’s Achilles heel’.

WHENEVER politicians promise a ‘ new deal’ it’s time to count the spoons. Like the terms ‘modernisation’ and ‘radical reform’, it’s usually a cover for something you’ll come to regret.

So it is with Labour’s New Deal for Working People. Superficially it sounds lovely.

Better wages, greater employment protection, more generous sick pay, stronger rights to flexible and home working, an end to ‘zero-hours’, no more annoying out-ofhours work calls and, of course, the repeal of every piece of anti- strike legislation brought in since 2010.

It will be, says a Labour spokesman, ‘the biggest transformation of the British economy for aeons’. Which is exactly what the business community is afraid of.

In their quarterly economic survey yesterday, the British Chambers of Commerce say many of their member firms are in a fragile state, especially those in hospitality.

Nearly half don’t expect an increase in revenue over the next 12 months and one in five think profits will fall. Where’s Labour’s new deal for them?

What they don’t need is another steep increase in costs, lower productivity, and a whole lot of instructions about how to run their business from an overweening state.

City grandee Sir Martin Sorrell led a chorus of criticism, warning the proposed policies could see firms collapse, widespread job losses and a soaring welfare bill.

Working from home is a privilege, not a right, and not all companies can offer it. Equally, many jobs aren’t nine-to-five, so out-of-hours calls come with the territory.

Zero-hours contracts suit some part-time workers, while additional wage rises would have to be passed on to customers, making some firms uncompetitive.

And as for strikes, public services from railways and schools to the NHS have been ravaged by industrial action in recent years. Labour’s plans could inflict similar mayhem on the private sector.

The architect of this workers’ paradise is deputy leader and property expert Angela Rayner, who dismisses criticism as the ‘squealing’ of vested interests. She would rush in the new legislation within 100 days of winning power.

Yet still, Sir Keir Starmer has the gall to claim Labour is ‘the party of business’. It’s about as convincing as Ms Rayner’s excuses for not paying capital gains tax on the sale of her ex-council house.