Small Businesses Warn of Risks from Labour's Proposed Workers' Rights Overhaul

Small businesses have expressed significant concerns regarding Angela Rayner's ambitious plans to reform workers' rights, labeling them a "real risk" to employment and the economy. The Labour Party's proposed "New Deal for Working People" is feared to escalate costs and risks for employers, potentially hindering job creation and access to entry-level positions. The Federation of Small Businesses (FSB) has reported that 64% of companies are already adopting more cautious recruitment practices in response to the recent increase in the national living wage. The FSB's research indicates that many employers are changing their hiring strategies due to the national living wage rise to £11.44 an hour. A quarter of small employers are now more inclined to hire candidates with prior experience, while one in five are hesitant to recruit individuals with inconsistent work histories. Additionally, 20% of employers are opting for short-term contracts and are more likely to seek experienced staff, reflecting a cautious approach to recruitment amid rising wage costs. Rayner's proposals extend beyond the recent wage increase, aiming to eliminate age bands for minimum wage eligibility and ensure a "real living wage." Other suggested reforms include banning zero-hour contracts, guaranteeing regular hours for workers, and establishing flexible working as a fundamental right. The FSB warns that increasing risks and costs for small businesses could exacerbate the current inactivity crisis and undermine efforts to reduce unemployment. The government has been approached for comment regarding these concerns, but no response has been received as of yet.