Labour Backer Urges Rethink on Workers Rights Bill Over Economic Fears

Billionaire John Caudwell has urged Sir Keir Starmer to abandon Labour’s proposed Employment Rights Bill, citing concerns that the reforms could make Britain less attractive to investors. Caudwell, who shifted support from the Conservatives to Labour in the previous year, believes the changes, particularly allowing employees to claim unfair dismissal from their first day, would destabilise the current balance between employer and employee rights.

Caudwell argues that Britain presently offers a fair compromise for both employers and staff. He warns that extending workers’ rights in the proposed manner will not only affect investment but could prompt businesses to move jobs offshore. The legislation seeks to grant day-one rights for unfair dismissal claims, abolish zero-hours contracts, and enable workers to claim statutory sick pay from the start of employment. At present, employees must work for two years before accessing unfair dismissal protections, a threshold some peers have suggested lowering but which the Government recently defended.

In his remarks, Caudwell stated that reducing the qualifying period would impact hiring practices, with companies potentially dismissing staff more quickly to avoid legal challenges. He maintains that scrapping zero-hours contracts would be particularly detrimental for seasonal staff, hospitality workers, and students who rely on flexible employment. Caudwell predicts that this policy would shrink job availability and contribute to higher unemployment.

The bill, championed by former deputy prime minister Angela Rayner, is set to empower trade unions further, making it easier for them to organise and facilitate industrial action. Caudwell criticises this approach, asserting that union influence is already significant and that further expansion could deter investment and economic growth. He reflects on his experience before the Thatcher era, recalling the negative impact of union power on business operations.

Caudwell, who built a considerable business employing more than 10,000 people, contends that legislators risk neglecting the needs of business owners and investors. He points out that the Resolution Foundation, a think tank aligned with Labour, has also criticised day-one rights as potentially harmful to the jobs market. Caudwell further expresses concerns over the planned extension of statutory sick pay, especially as employers currently shoulder an £85 billion annual cost due to long-term sickness, much of it driven by a rise in mental health issues.

Addressing broader economic policy, Caudwell proposes a five per cent increase in the top rate of income tax alongside a one per cent rise in VAT, highlighting the fiscal responsibility required in the wake of pandemic spending. He emphasises the need for Government efficiency, suggesting significant reductions in public sector waste without impairing services. Caudwell remains sceptical about Labour’s current trajectory, stressing the importance of credible, pro-growth policies to maintain support from the business community.