As the Labour government pushes forward with sweeping changes to workers’ rights, business leaders and Conservatives are sounding the alarm.

Deputy Prime Minister Angela Rayner’s proposed Employment Rights Bill is facing fierce criticism over concerns that it could severely damage the UK economy.

Conservatives Urge Companies to Speak Out

In a public plea over the weekend, Conservatives issued an open letter to business leaders, calling on them to take a stand against what they see as destructive labour laws.

Shadow Business Secretary Andrew Griffith wrote that British businesses risk being “sleepwalked into disaster” if they don’t act now.

Griffith pointed out that even the government’s own calculations show the new laws could cost the economy around £5 billion a year and result in the loss of up to 50,000 jobs.

“We can’t fight this alone,” he said. “We need the business community to raise their voices.”

What’s in the Employment Rights Bill?

Rayner’s bill proposes several big changes to current employment law, including:

Repealing Conservative-era trade union legislation
Lowering the threshold for legal strike action
Banning zero-hours contracts
Giving workers stronger redundancy protections
Allowing ministers to sue companies on behalf of employees—even if those workers don’t want to pursue action themselves

One particularly controversial detail is that the new rules would make union funding for the Labour Party automatic, something critics have labelled a conflict of interest.

Cabinet Split Emerges Over Economic Fears

Even inside the Cabinet, there’s tension. Chancellor Rachel Reeves has reportedly been trying to soften some of the bill’s more dramatic elements, hoping to avoid further economic strain.

When asked if she was working behind the scenes to limit the fallout, Reeves simply said, “We talk to businesses all the time.”

Business Leaders Compare Plan to 1970s Economic Chaos

Several well-known business figures didn’t hold back their criticism.

Lord Karan Bilimoria, founder of Cobra Beer and UK head of the International Chamber of Commerce, warned that easier strike rules will bring more disruptions.

“This feels like the 1970s all over again,” he said, referencing the era when the UK was dubbed the “sick man of Europe.”

Entrepreneur and ex-Pizza Express chairman Luke Johnson called the bill “madness,” especially in a time of rising unemployment and economic uncertainty.

“It’s like we’ve learned nothing,” he said. “This could send us right back to the days when the country was broke and begging the IMF for help.”

Critics Say Rayner Is Out of Touch With Private Sector

Johnson also accused Angela Rayner of being disconnected from the realities of running a business.

“She doesn’t understand what it’s like to risk your home to pay your staff,” he said.

“She only talks to civil servants and union bosses.”

He predicted that the Labour Party’s ideology would eventually crash into economic reality—dragging the entire country into a recession in the process.

Business Groups Warn of ‘Unintended Consequences’

Leaders of major business organisations echoed similar concerns.

The British Chambers of Commerce said the bill could unintentionally hurt job creation and economic growth.

The British Retail Consortium added that keeping the 50% strike vote threshold is vital to reflect the true will of workers—not just the loudest voices.

Labour Hits Back, Accuses Critics of Hypocrisy

Labour responded by accusing the Conservatives of hypocrisy.

A party spokesperson argued that the same Tories who “crashed the economy” now want to deny workers basic rights like sick pay and protection from unfair dismissal.

“These changes have been developed in consultation with business,” the spokesperson said.

“They’re not just good for workers—they’re good for the economy too.”