Photo caption: UK Prime Minister Sir Keir Starmer
Sir Keir Starmer’s workers’ rights overhaul could cost up to £1,100 per person in terms of lost economic growth, a think tank has warned.
The Employment Rights Bill will wipe between 1.4pc to 2.8pc from GDP per person within a decade, according to the Growth Commission, an independent body of economists backed by Liz Truss.
This blow to living standards – which are most commonly measured as GDP per head – would amount to as much £1,108 per person, the group said.
For the economy as a whole, it predicts that the cost would range between £38bn and £76bn.
Shanker Singham, chairman of the Growth Commission, said: “The evidence is clear from our calculations that the Employment Rights Bill will further harm the UK’s economic prospects.”
His comments will fuel scrutiny of the bill, which seeks to strengthen workers’ rights by introducing a range of new powers. This includes greater rights from the first day of employment and better sick pay.
Britain’s biggest business groups recently warned the Government that the legislation would do “significant damage” to the economy.
Even the Left-leaning Resolution Foundation has said it risks crippling the jobs market.
However, despite growing scrutiny of the bill, Steve Reed, the Housing Secretary, said on Monday that the Government had no plans to water down its proposed employment rights overhaul.
Spanish-style labour market
In particular, the Growth Commission said the incoming legislation would make the job market less flexible at a time when employers are already struggling to cope with big tax raises and minimum wage increases.
The group said the planned reforms would make the UK more similar to Spain in terms of labour market regulation, a country where the unemployment rate is above 10pc.
Mr Singham said: “If the Government is serious about prioritising growth, it should drop the Employment Rights Bill from its legislative agenda as a matter of urgency.”
The Tories also accused Labour of going “out of its way” to raise unemployment.
Andrew Griffith, the shadow business secretary, said: “This report is just another from a series of business groups and think tanks all saying this bill will damage rather than help the economy.
“Whilst all eyes are on the next Budget, more red tape and fewer jobs is the last thing business needs. Every Labour government leaves unemployment higher but this one is going out of its way to ensure that.”
A government spokesman said: “We do not recognise these figures. This bill will benefit the economy by helping businesses to thrive as well as raising living standards across the country, creating opportunities for all.”
=== The Telegraph ===
