Business leaders were given a stark warning today as Conservative Party leader Kemi Badenoch spoke out against Labour’s proposed expansion of workers’ rights.
She described the plans as an “assault” on flexible working that could stifle economic growth and take Britain back to a world where unions dominate and employers bear the burden.
Badenoch highlighted that measures like day-one paternity leave and updates to statutory sick pay are set to come into effect in April next year, while tougher rules, including a ban on unfair zero-hours contracts, are expected in 2027.
Employers Warned About Rising Costs
The Bill has already drawn criticism from employers, who argue it will increase costs and complicate operations.
Speaking at the Confederation of British Industries (CBI) conference, Badenoch did not hold back, describing the legislation as a “330-page assault on flexible working … written in the TUC’s headquarters.”
She argued that Britain’s flexible labour markets have long been a cornerstone of economic success.
They created millions of jobs after the financial crisis, helped keep unemployment lower than in competing countries, and were a key factor in Britain’s rise as the largest net exporter of financial services up until 2024.
According to Badenoch, Labour’s proposals risk undoing all of that progress.
Tax Worries Loom Ahead of the Budget
The warnings came just days before the upcoming Budget, which is expected to introduce new taxes affecting both workers and businesses.
Badenoch accused Labour of presenting these increases as “necessary,” when in reality, she argued, they are far from it.
The CBI’s Rain Newton-Smith also urged the Government to avoid heaping further costs onto businesses, warning against a scenario she called “death by a thousand taxes.”
She stressed that Chancellor Dame Jeremy Reeves needs to make tough, decisive choices instead of short-term political compromises.
Calls for Hard Choices on Growth
Newton-Smith emphasized that bold decisions on welfare spending and pensions are essential to secure long-term economic growth.
She warned that short-term political thinking could lead to decades of stagnation, and that it was critical to tackle the hardest decisions now before they become even more difficult.
Her message was clear: a few broad tax measures are far better than multiple smaller hikes that risk undermining business confidence.
Economic Forecasts Show Challenges Ahead
The scale of the Chancellor’s challenge was underlined by a Sky News report, which revealed that the Office for Budget Responsibility (OBR) has downgraded growth forecasts for 2026 and every year leading up to the next election in 2029.
Chancellor Reeves has already acknowledged that lower productivity projections will hit economic growth and reduce tax revenues, forcing her to consider tougher tax rises to balance the books and build a buffer against future shocks.
Looking Ahead
With Labour’s workers’ rights proposals looming and the Budget set to address shrinking fiscal headroom, the coming months are shaping up to be a testing period for the Government.
Businesses and policymakers alike are bracing for decisions that could reshape the UK’s economic landscape for years to come.
Share on Facebook «||» Share on Twitter «||» Share on Reddit «||» Share on LinkedIn