The debate over Labour’s sweeping employment reforms took another sharp turn, as Kemi Badenoch used a major business gathering to issue one of her strongest criticisms yet.
Speaking plainly to industry leaders, the Conservative Party leader argued that Labour’s approach would drag the country backwards and threaten the flexible work culture many companies rely on.
Badenoch Says the Bill Risks Undoing Decades of Progress
In her remarks at the Confederation of British Industry conference, Badenoch didn’t hold back.
She claimed Labour’s 330-page legislation reads like something drafted straight out of union headquarters, accusing it of undermining a successful labour model Britain has relied on for decades.
According to her, flexible working has been a cornerstone of job creation since the financial crash, and one of the main factors that helped keep unemployment lower than many comparable nations.
She also pointed out that this environment contributed to the UK becoming the world’s largest net exporter of financial services through 2024.
Her message was blunt: this Bill threatens to unravel all of that.
What the New Measures Would Bring In
The first part of Labour’s plan is set to roll out next April.
That initial bundle includes day-one paternity leave and updates to statutory sick pay rules—changes Labour argues are long overdue.
More contentious proposals, like outlawing unfair zero-hours contracts, aren’t expected until 2027.
Businesses, however, have already raised concerns about the extra costs and complicated adjustments they believe the Bill will force upon them.
Tensions Rise Ahead of a Tough Budget Week
Badenoch’s criticism didn’t end with the workers’ rights package.
With a tax-heavy Budget only days away, she accused Labour of preparing to mask higher taxes as unavoidable necessities.
The tone reflected growing anxiety across industries about what Wednesday’s announcements might bring.
And those concerns aren’t coming only from Conservatives.
Business Leaders Urge Labour to ‘Change Course’
Rain Newton-Smith, who heads the CBI, delivered a clear message of her own to Chancellor Rachel Reeves: now isn’t the time to pile more burdens on struggling firms.
Speaking at the same conference in Westminster, she urged the Chancellor to resist political pressure and make decisions focused squarely on growth—even the unpopular ones.
She warned that relying on a series of smaller tax increases would amount to “death by a thousand taxes,” pushing the UK into another period of stagnation.
In her view, the government must take a few hard decisions now to avoid many more painful ones later.
Economic Clouds Form as Growth Forecasts Fall
Adding another layer of difficulty, a Sky News report revealed that the Office for Budget Responsibility has downgraded its growth projections for 2026 and for every following year leading up to the next election in 2029.
Reeves had already admitted publicly that weaker productivity assumptions were going to hit the numbers, but the scale of the downgrade paints a much tougher picture.
Lower growth means less tax revenue, and that reality leaves Reeves with limited room to maneuver.
To meet her own fiscal goals and build a stronger buffer for future shocks, she is expected to raise taxes—despite how unpopular the move may be.
A Government Facing Hard Choices and Little Breathing Room
The coming days are shaping up to be difficult ones for the Chancellor.
With shrinking headroom, slowing growth, and criticism hitting from both political rivals and business leaders, Reeves must find a path that keeps the economy stable without alienating the firms she needs to maintain confidence.
For now, both sides seem locked in a tense standoff: Labour pushing ahead with its reforms and fiscal plans, and business leaders insisting the government rethink before long-term damage sets in.g
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