Experts urge UK to ease workplace protections for growth

Experts are advising Rachel Reeves, the Chancellor, to remove strict workers’ rights regulations or risk harming economic growth by the end of the decade. They say that new rules, such as increased job protections from the first day of employment and easier union recognition, add unnecessary bureaucracy for businesses. These reforms, promoted by Deputy Prime Minister Angela Rayner, have drawn criticism from the business community. They argue that changes regarding sick pay and zero-hours contracts could cost firms up to £5 billion a year. In addition, pressure is mounting on Reeves to reduce the corporation tax rate, which is currently at 25%. The Growth Commission is warning that the proposed workplace changes could cause significant harm. Expert Shanker Singham expressed concerns that the new Employment Rights Bill could burden small businesses, making it harder for them to hire employees. He noted that the UK already has strong workers’ rights and that these new measures could make the country less attractive for business. Another concern is the increase in the national living wage, set to rise from £11.44 to £12.21 for workers over 21 next month. Critics, including Lord Moynihan, argue that this will discourage employers from hiring new staff, impacting young people the most. Experts are also urging Reeves to decrease the corporation tax rate to 21%, pointing out that it was lower between 2017 and 2022. In related news, Sir Keir Starmer defended Reeves after she faced criticism for accepting free tickets to a concert, saying that ministers should make their own judgments about hospitality matters.