Employment Rights: Impact on Businesses

Andy McDonald Excerpts

Tuesday 16th September 2025 Westminster Hall

[Dame Harriett Baldwin (West Worcestershire) (Con)]

It is an honour to serve under your chairmanship, Dr Murrison. I congratulate my hon. Friend the Member for Spelthorne (Lincoln Jopp) on securing the debate. I welcome the Minister to her position; I believe that this is her first opportunity to contribute from the Dispatch Box. I heartily congratulate her on her achievement.

We have had an interesting debate. My hon. Friend the Member for Spelthorne set out clearly some of the issues with the Employment Rights Bill from his constituents’ perspective. I then heard the completely opposite view from the hon. Member for York Central (Rachael Maskell), who inexplicably has not been readmitted into the bosom of the Labour party. I hope her readmission is imminent, because she put the governing party lines across very clearly.

The clue is in the name of the debate: we have to focus on employment. Today’s labour market data was sobering and should serve as a wake-up call to the Labour Government. Payroll employment has fallen by 142,000—more people than any one of our constituencies contains—and has declined in every quarter. It is not a blip. Sadly, it is a trend, and it is happening on this Government’s watch because of measures such as the Employment Rights Bill and the jobs tax. Vacancies are also falling. My first question to the Minister is how she reconciles that with Labour’s mission to deliver economic growth.

[Andy McDonald (Middlesbrough and Thornaby East) (Lab)]

Will the shadow Minister give way?

[Dame Harriett Baldwin]

Does the hon. Gentleman wish to deny the employment facts from the Office for National Statistics?

[Andy McDonald]

I wish to intervene, not to have the shadow Minister shape the terms of my intervention. She is talking about the impact of the Employment Rights Bill. How can that be? Has it yet been enacted?

[Dame Harriett Baldwin]

I am glad that the hon. Gentleman anticipates the rest of my contribution. Has the hon. Gentleman read the impact assessment that the Labour Government have put out for the Bill? It estimates that the cost on businesses will be £5 billion. I ask him how he thinks that will end up. It will not end with a hiring spree, I can assure him.

Against the background of rising unemployment, what is the Government’s answer? It is more regulation, more costs and more pressure on employers, as we saw last night when we debated the Employment Rights Bill. It would be more apt to call it the unemployment rights Bill. What assessment has the Minister made of the impact of today’s rising unemployment and slowing job creation on those who really need an employer to give them their first chance, particularly young and entry-level workers?

If the Government are serious about making work pay, they must stop making it harder for businesses to hire, invest and grow. The British people deserve better than a shrinking jobs market and a Government who have clearly let the trade unions take the wheel. Yesterday, the Government chose to vote down all the amendments that had been agreed in the other place. They voted to reject the requirement to consult small businesses about the impact of the Bill. They voted against reinstating the requirement for the trade unions to choose to opt into the political fund. The Bill changes it to an opt-out. It is a vote for endless trade union payments. I hope that the Minister will declare her interest in relation to contributions from the unions to her election campaign.

Yesterday, the Government voted against the reinstatement of a 50% trade union member threshold for voting for industrial action. I am afraid that that is a vote for more strikes. How can the public trust that the Employment Rights Bill serves the national interest when over 200 Labour MPs have taken millions from the unions, and when the Bill appears to prioritise union access and strike powers over the much-desired economic growth?

As I have mentioned, the Government’s own impact assessment says that there will be a £5 billion cost to business. The Prime Minister’s new economic adviser, Minouche Shafik, has admitted that Labour’s Employment Rights Bill will lead to fewer jobs. We need not listen just to her. The National Farmers Union has warned that the Bill ignores the seasonal nature of agricultural work. The UK Cinema Association has said that it is “no exaggeration to say” that this Bill will bring the viability of some operators into question. The Institute of Chartered Accountants in England and Wales has highlighted the risk to small businesses: it is all but guaranteed, it says, that small businesses will adopt more risk-averse recruitment practices in response, if they are confident about taking on any new talent at all.

My heart goes out—my hon. Friend the Member for Spelthorne made this point passionately—to all those people who need an employer to take a chance on them. I am thinking of the people who are perhaps a little riskier to take into an organisation and who really need someone to give them that chance—possibly their first chance. One well-known employer is exceptional in that regard: the large employer Mitie. It warns of higher costs and tribunal pressures, and that the right in relation to unfair dismissal will cripple smaller organisations. It adds that it is crucial that the Government permit some flexibility for employers that need to adapt to fluctuating demand.

These are not fringe concerns. These are the voices of employers across agriculture, culture, services and finance, who are united in their message that this employment rights legislation will make it harder to hire, harder for the country to grow and harder to serve the public. The Labour Government’s refusal to listen to these voices is not just reckless; it is simply ideological. I think we heard some of that in this afternoon’s debate.

The Bill is not about improving rights. It is about empowering the paymasters, the unions, and about punishing enterprise. What I can say to the country is that under Conservative leadership, we will stand with business, grow jobs and deliver growth in the overall economy, because that is the only way to build a stronger, fairer economy that gives everyone an opportunity.

--- Later in debate ---

[Andy McDonald]

If workers are in good, well-paid work, they can go on to lead good, flourishing lives, and they will return that as a dividend through their collaboration with their employer. They will also be in a position to be more active in the economy. We know that when working people have money, they are able to spend it and generate activity in the economy. Does the Minister agree?

[Kate Dearden]

I absolutely agree that all workers will benefit in some way from the Bill and be able to give back to the economy, whether by spending in the local economy or by contributing to other local businesses.