Employment rights bill will cost firms £5bn per year but benefits will justify costs, government says – UK politics live

Employment rights bill will cost firms almost £5bn per year, but overall gains will justify this, government analysis claims

The Department for Business and Trade has said the benefits of the employment rights bill will justify the costs it will impose on business amounting to nearly £5bn per year.

It has set out this assessment in an economic analysis of the bill, published alongside 24 regulatory impact assessment setting out the direct costs of the measures included in the legislation.

The bill, which is getting its second reading in the Commons this afternoon, has been described as “the biggest overhaul of workers rights in generations”. It will significantly strengthen workers’ rights.

In its economic analysis, the government says that some of these new regulations will impose new costs on business.

We expect the policies covered within the bill to impose a direct cost on business equivalent to low billion pounds per year. If we take the top-end of the range from our broad order of magnitude cost to business estimates in tables A3, A4, and A5 to get the maximum likely cost this sum to £4.5bn [sic]. As such, we are confident that the total direct cost to business will be less than £5bn annually. This represents a cautious assessment, and we expect the total cost to business to be refined downwards as our evidence improves and the policy development continues

Nevertheless, to contextualise the size of this impact, total wage costs in the UK were £1.3 trillion in 2023 in nominal terms, meaning that an annual cost of up to £5bn is equivalent to an uplift of the UK’s total pay bill of up to 0.4%. This cost will be concentrated on employers in lower paid sectors, but even if we assumed all of this cost falls on such sectors, then hypothetically the equivalent uplift in the wage bill for that part of the economy would be up to 1.5%.

The report says the empirical evidence about who would pay the cost of stronger employment protections is “ambiguous”. It says firms might pass on higher costs to customers. If they cannot do that, they might cut investment or training costs, or cut employment costs, it says.

But the report says giving workers more rights will cut the number of days lost to stress, depression and anxiety, which it implies will more or less compensate for the increase in direct costs. It says:

There will be further benefits for those in work from better job satisfaction, as well as improved wellbeing and health, which could be amount to billions of pounds a year. This will benefit their employers too as 17.1 million working days were lost due to stress, depression or anxiety in 2022/233 , equivalent to over £5bn of lost output.

And the report says, overall, the impact of the bill will be positive.

There are clear, evidence-based benefits of government action through the bill. Not acting would enable poor working conditions, insecure work, inequalities and broken industrial relations to persist.

The bill will strengthen working conditions for the lowest-paid and most vulnerable in the labour market, increasing fairness and equality across Britain. It will have significant positive impacts on workers who are trapped in insecure work, face discrimination, or suffer from unscrupulous employer behaviour like ‘fire and refire’ practices. [See 2.52pm.] Many policy changes in the bill will target the issues identified by the independent Taylor review of modern working practices.

Workers in adult social care, those covered by collective bargaining agreements, those grieving a loss of a loved family member, and those struggling to make work fit in around other commitments will also be notable beneficiaries …

The package will be significantly positive for society (i.e., the benefits will outweigh the costs) if policy implementation is well-targeted, and the risks of unintended consequences are mitigated through consultation and policy design. We intend to refine this assessment as policy development continues.

Impact assessment of employment rights bill measures on business – showing impact over 10 years (Business NPV) and annualised impact (EANDCB) Photograph: Business Department

Key events

Show key events only

Please turn on JavaScript to use this feature

At the afternoon Downing Street lobby briefing the PM’s spokesperson defended the employment rights bill. Asked about figures showing it would increase direct costs for business (see 3.48pm), the spokesperson said:

What this bill represents is an investment by businesses, by employers into their employees.

For too long, poor productivity, insecure work and broken industrial relations have held back the economy.

Last year we saw the highest number of working days lost to strikes since the 1980s, costing the economy billions of pounds.

Employment rights bill will have small but positive impact on growth, government analysis claims

Angela Rayner, the deputy PM and housing secretary, is opening the debate on the employment rights bill. She said the impact assessment published by the government today says the legislation will be good for growth.

But, in an early intervention, the Conservative MP Graham Stuart said that document just said the measures might be good for growth. And, if there was a postive impact on growth, it would be small in magnitude according to the document, Stuart said.

In the executive summary of its economic analysis, the government says:

We conclude the package could have a direct and positive impact on economic growth, but we expect this to be small.

And here is the more considered conclusion, from paragraphs 168 and 169.

On balance, we believe the impact on growth could be positive (i.e. the positive channels above outweigh the offsetting effects) but the direct impact would be small in magnitude. This is because the package is well targeted at low-paying sectors meaning that many of the channels covered above are less applicable for a large part of the economy. In addition, the evidence between employment rights and growth in the UK is limited, but where we do have strong, policy-specific evidence it often indicates that the policy has had a negligible effect on growth. For example, the national living wage, which has imposed a similar magnitude of costs on a similar part of the labour market in recent years as we expect the bill to have, has had a limited impact on productivity and participation (and by extension growth) in either direction. It is right that there is evidence linking flexible working to stronger productivity and this change will boost productivity for some workers and some employers, but the increase in uptake of ‘making flexible working the default’ is relatively small compared to the number of people employed and therefore, at a macroeconomic level, the impact on average productivity will be small.

Whilst we conclude that the direct impact would be small, it is likely that by boosting protections and the quality of work for the poorest in the labour market, the package will enhance lower-paid workers’ share in the benefits of growth and boost equality in work. This is more than just good for equality; it could be good for the economy too as there is evidence that equality is important for ‘sustainable’ growth over the long-term. For example, the OECD note that higher inequality can lead to underinvestment in human capital and weaker adoption of technologies. They estimate that as a result of rising inequality between 1990 and 2010 output in the UK was almost nine percentage points lower than it could have otherwise been. As a result, by increasing the security, quality and equality of work, it’s possible that the bill could also indirectly support the government’s mission to grow the economy beyond a small direct impact, helping to raise living standards across the country.

Braverman sent govenment documents to personal email address 127 times as attorney general, FoI case reveals

Suella Braverman forwarded government documents to her private email accounts on at least 127 occasions when she was attorney general, according to a story by George Greenwood at the Times.

The Attorney General’s Office disclosed the figure after a lengthy Freedom of Information battle culminated in a tribunal finding against the government. Braverman, who became home secretary after serving as attorney general but who was sacked from the Home Office for sending a government document from her personal email address, did not respond to a request from the Times for comment.

Greenwood said that sending documents to her personal email address when she was attorney general may have been a breach of the ministerial code. He says:

It is not known whether Braverman forwarded sensitive or official documents to her personal account. The Attorney General’s Office (AGO) did not respond to a request for comment.

Commenting on the economic analysis of the employment rights bill published by the government today (see 3.48pm), Paul Nowak, general secretary of the TUC, said:

Despite repeated attempts to paint this bill as bad for business, this rigorous impact assessment shows that the business costs are negligible and are more than offset by the wider economic and social gains.

These changes will mostly affect those companies whose business models have been built on low-paid, insecure employment.

Decent employers will welcome these measures and the improvements they will bring for their businesses and workforces.

Employment rights bill will cost firms almost £5bn per year, but overall gains will justify this, government analysis claims

The Department for Business and Trade has said the benefits of the employment rights bill will justify the costs it will impose on business amounting to nearly £5bn per year.

It has set out this assessment in an economic analysis of the bill, published alongside 24 regulatory impact assessment setting out the direct costs of the measures included in the legislation.

The bill, which is getting its second reading in the Commons this afternoon, has been described as “the biggest overhaul of workers rights in generations”. It will significantly strengthen workers’ rights.

In its economic analysis, the government says that some of these new regulations will impose new costs on business.

We expect the policies covered within the bill to impose a direct cost on business equivalent to low billion pounds per year. If we take the top-end of the range from our broad order of magnitude cost to business estimates in tables A3, A4, and A5 to get the maximum likely cost this sum to £4.5bn [sic]. As such, we are confident that the total direct cost to business will be less than £5bn annually. This represents a cautious assessment, and we expect the total cost to business to be refined downwards as our evidence improves and the policy development continues

Nevertheless, to contextualise the size of this impact, total wage costs in the UK were £1.3 trillion in 2023 in nominal terms, meaning that an annual cost of up to £5bn is equivalent to an uplift of the UK’s total pay bill of up to 0.4%. This cost will be concentrated on employers in lower paid sectors, but even if we assumed all of this cost falls on such sectors, then hypothetically the equivalent uplift in the wage bill for that part of the economy would be up to 1.5%.

The report says the empirical evidence about who would pay the cost of stronger employment protections is “ambiguous”. It says firms might pass on higher costs to customers. If they cannot do that, they might cut investment or training costs, or cut employment costs, it says.

But the report says giving workers more rights will cut the number of days lost to stress, depression and anxiety, which it implies will more or less compensate for the increase in direct costs. It says:

There will be further benefits for those in work from better job satisfaction, as well as improved wellbeing and health, which could be amount to billions of pounds a year. This will benefit their employers too as 17.1 million working days were lost due to stress, depression or anxiety in 2022/233 , equivalent to over £5bn of lost output.

And the report says, overall, the impact of the bill will be positive.

There are clear, evidence-based benefits of government action through the bill. Not acting would enable poor working conditions, insecure work, inequalities and broken industrial relations to persist.

The bill will strengthen working conditions for the lowest-paid and most vulnerable in the labour market, increasing fairness and equality across Britain. It will have significant positive impacts on workers who are trapped in insecure work, face discrimination, or suffer from unscrupulous employer behaviour like ‘fire and refire’ practices. [See 2.52pm.] Many policy changes in the bill will target the issues identified by the independent Taylor review of modern working practices.

Workers in adult social care, those covered by collective bargaining agreements, those grieving a loss of a loved family member, and those struggling to make work fit in around other commitments will also be notable beneficiaries …

The package will be significantly positive for society (i.e., the benefits will outweigh the costs) if policy implementation is well-targeted, and the risks of unintended consequences are mitigated through consultation and policy design. We intend to refine this assessment as policy development continues.

Inspectors have raised serious concerns about the care provided to child asylum seekers who arrive in the UK on small boats, including babies who have had their fingerprints scanned and lone children left to sleep on mats on the floor.

A report published today by HM Inspectorate of Prisons on short-term holding facilities in Kent, including Manston, Western Jet Foil and two Kent Intake Units, found that overall there had been improvements and improved management of new arrivals.

However serious concerns are flagged about the welfare of the new arrivals, especially children.

Detainees are given wrist tags with QR codes and fingerprints are repeatedly scanned including babies. The Home Office did not always keep correct records of the length of time people were detained, with one person held for 106 hours incorrectly recorded as detained for 51 hours. New arrivals are supposed to be held for a maximum of 24 hours.

One ten year-old Afghan boy asked for a phone so he could call his mum but was told that would not be possible while a 15-year-old girl who said she had been sold to traffickers was interviewed without an appropriate adult. Some Border Force staff and cleaners working on the frontline had not been DBS checked and one contractor was sacked for aggressively pulling a sleeping child to their feet and making disparaging comments to them.

There were examples of children being woken up at night to be interviewed with one child interviewed at 1.20am.

Inspectors said that at Kent Intake Unit in Dover some of the lone child arrivals were very young ‘and had obviously been fitted on arrival with wrist tags with QR codes”.

Here is our latest Politics Weekly podcast. It features Pippa Crerar and Kiran Stacey talking about the NHS consultation, and about next week’s budget.

Workers in lowest-paid, insecure jobs could gain £600 a year from measures in employment rights bill, government claims

Workers in some of the lowest-paid and most insecure jobs could gain an extra £600 a year from the measures in the employment rights bill being debated later, the government claims.

In a news release, the Department for Business and Trade says:

Poor productivity, insecure work, and broken industrial relations have been holding back the British economy for too long. Last year the country saw the highest number of working days lost to strikes since the 1980s – costing the economy millions of pounds. This has entrenched a culture of brinkmanship that only serves to damage public services, public finances, and public faith in institutions. Today is a significant step in putting an end to that – as the Employment Rights Bill reaches its second reading, alongside a package of consultations to help inform its next steps. This includes a consultation on our new approach to Statutory Sick Pay, where the Bill will be removing the waiting period and the Lower Earnings Limit.

The Bill is expected to benefit people in some of the most deprived areas of the country by saving them up to £600 in lost income from the hidden costs of insecure work. Around 2.4 million people in the UK work irregular patterns like zero or low hours contracts or agency jobs, where insecure hours can mean forking out on expensive childcare or transport to cover last-minute shifts - or losing out altogether if work is changed or cancelled at short notice.

New protections like guaranteed hours and giving reasonable notice or compensation for lost work will help shift workers keep up to £600 a year, including workers in the North and Midlands where irregular work is highest.

For a cleaner working night shifts on an average annual wage of £21,058, a £600 saving would be worth over £250 more a year than the last two national insurance cuts.

MPs will debate the second reading of the employment rights bill later this afternoon. To coincide with the debate, the Department for Business and Trade has published more than 20 impact assessments relating to the bill.

I will post more on what they say shortly.

Health chief says consultation exercise will produce 'great ideas' as joke ideas included in early responses

A “maximum BMI for nurses” and an “NHS TV channel” are just some of the suggestions put forward as officials launched a national consultation on the future of the health service, PA Media reports. PA says:

Hundreds of suggestions were put forward in the hours after the consultation was officially launched by ministers on Monday.

Billed as “the biggest national conversation about the future of the NHS since its birth”, members of the public will be able to share their views online via change.NHS.uk until the start of next year.

Topics of conversation include streamlining management, providing better pay for NHS workers, improving access to dentistry and social care, among others.

One contributor called for an NHS TV channel “for patients to access physiotherapy exercise sessions for various conditions”.

Another called for free parking in hospitals while others suggested that the service should prescribe gym memberships to help tackle the nation’s obesity crisis.

Some of the suggestions need to be taken with a pinch of salt, such as one contributor calling for all doctors to be given “Doctor Who” name badges.

One contributor called for free cinema tickets “on the NHS”.

Another said that staff “should lead by example” as they said that the NHS should introduce a maximum BMI score for nurses.

There are other examples of joke responses at 1.29pm.

In an interview with Sky News, NHS England’s national medical director Prof Sir Stephen Powis defended the consultation exercise. Asked about previous public engagement activities, such as the public poll which saw Boaty McBoatface emerge as the winning choice for the naming of a polar research ship (it was vetoed and named RRS Sir David Attenborough instead), Powis said:

I’m really confident that patients and staff often have the solutions to problems.

I visit many, many health organisations, whether it’s in general practice or in hospitals, every week and I’m always struck that staff and patients have ideas, they have great ideas.

Our job is to capture them, to test them, and where they work, to ensure that we roll them out as quickly as possible.

So I’m very confident that there will be a lot of great ideas coming out of this listening exercise.

No 10 says making anonymised NHS data available to firms for medical research could provide significant benefits for patients

At the Downing Street lobby briefing the prime minister’s spokesperson was asked about the plan for digital “patient passports”, and what would be done to stop random NHS employees being able to read the records. Stephen Kinnock, the care minister, came under pressure when asked about this on the Today programme. (See 9.43am.) Asked about the same issue, the spokesperson said:

The data bill will introduce strong security protocols to protect data, and all NHS organisations have got strong governance arrangements in place.

But what this data bill will also do is transform patients’ experience, and that is obviously putting patients at the heart of our reforms.

But the spokesperson also said that any data shared with organisations outside the NHS for medical research purposes would be anonymised. There would also be security protocols too, he said. He went on:

But we do think that there is significant opportunity in this space, within those parameters and with those strict controls, to drive research and game-changing innovations that will ultimately be a benefit to patients in the NHS.

Some journalists have been monitoring responses to the NHS consultation launched by Keir Starmer and Wes Streeting this morning, and they’re noting that not everyone is engaging seriously.

From the Times’s Chris Smyth

From Katy Balls at the Spectator

From Christian Calgie at the Express

And these are from James Ball from the New European

I’d imagine somewhere in the Department of Health there is a civil servant currently feeling *extremely* vindicated over their attempt to explain why consultation responses aren’t usually just immediately made public.

(Among the many reasons is that they’re extremely game-able by pressure groups, who think flooding them with similar responses is in any way useful, etc)

No 10 ducks question about whether Britain historically guilty of genocide in Australia

At the Downing Street lobby briefing the PM’s spokesperson was also asked if Keir Starmer agreed that Britain was historically guilty of genocide in Australia, as an Indigenous Australian senator said when she hecked King Charles at Parliament House in Canberra. Lidia Thorpe told Charles:

You committed genocide against our people. Give us our land back. Give us what you stole from us – our bones, our skulls, our babies, our people.

Asked if Britain was guilty of genocide in Australia, the spokesperson said he would not be drawn on comments made in relation to royal matters. But he said Britain’s relationship with Australia was “fantastic” and that it was a key ally.

No 10 says Starmer won't be offering reparations or apology over Britain's role in slavery at Commonwealth summit

As Eleni Courea reports, Keir Starmer is under pressure from Labour MPs and Caribbean governments to open the door to reparatory justice when he travels to Samoa this week.

At the Downing Street lobby briefing, the prime minister’s spokesperson said the government remained opposed to the idea of paying reparations for Britain’s historic role in the slave trade. The spokesperson also said there would be no apology at the Commonwealth heads of government meeting (Chogm) this week.

He said:

Reparations are not on the agenda for the Commonwealth heads of government meeting. The government’s position on this has not changed, we do not pay reparations.

The prime minister’s attending this week’s summit to discuss shared challenges and opportunities faced by the Commonwealth including driving growth across our economies.

Asked about an apology, the spokesperson said:

The position on apology remains the same. We won’t be offering an apology at Chogm, but we will continue to engage with partners on the issues as we work with them to tackle the pressing challenges of today and indeed for the future generations.

Voters overwhelmingly in favour of employers' NICs going up if money going to NHS, polling for Labour thinktank suggests

Most voters will back a rise in employers’ national insurance contributions if the money goes towards the NHS, according to polling commissioned by a Labour thinktank.

The YouGov polling suggests that, when people are just asked if they approve or disapprove of a rise in employers’ NICs, they disapprove by 40% to 30%.

But when people are asked if they would approve this tax going up to fund healthcare and the NHS, they are in favour by 69% to 18%.

People who voted Labour at the election are even more supportive, with 85% of them approving of the idea, the polling suggests. And people who voted Labour in the 2024 election having voted Conservative in 2019 are also 82% in favour.

Rachel Reeves, the chancellor, has strongly hinted that employers’ NICs will go up in the budget. She has said that this tax was not covered by the Labour manifesto promise not to put up national insurance generally.

The polling was commissioned by Labour Together, a thintank and campaign group partly set up by Morgan McSweeney, who is now Keir Starmer’s chief of staff. It is focused on prompting policies that will help the party to carry on winning elections.

YouGov also explored what other reasons might make people support a rise in employers’ NICs. Extra money for health was by far the most powerful motivator, but people would also back employers’ NICs going up if told the money would be used for education, for tax cuts or for the police.

But if told the money was going on defence, on cutting the national debt or on giving public sectors a pay rise, they were not in favour.

Matt Upton, director of policy at Labour Together, said:

Time and time again in polls and focus groups, voters across the country have told us that Labour must deliver on their key priorities: the NHS and cost of living. If it doesn’t, it faces prompt dismissal at the next election.

This polling shows that voters are overwhelmingly willing to back a potential tax rise like this on business, if the money is spent on the things they care most about.

Crucially for Labour strategists, support for this is even higher among those who switched from the Tories in 2019 to Labour in 2024.

This group, though small in number, were decisive at this election and will be again at the next one if Labour is to win a second term.

Robert Jenrick, the Tory leadership candidate, has called for manadory life sentences for members of grooming gangs. In an interview with GB News, he said:

The public want action now. They are sick of this. This is a moral stain on our country, that thousands of children have been abused in this way and public officials have turned a blind eye to it.

What we need is action now to try to eliminate this, because only a fool would believe this isn’t happening today on our streets somewhere in our country.

What I want to see are mandatory life sentences for these despicable predators, so that you’re not out in 14 years, as the current law suggests, or less, but actually you’re never out of prison again.

I want those of these predators who are not British citizens to be removed from our country with compulsory deportations, and the public officials who turn a blind eye for fear of racism or community relations, I want them to be prosecuted and barred from working in the public sector ever again.

Ex-council chief executive who had to apologise for anti-monarchy comment becomes SNP's acting chief executive

A former council chief executive who had to apologise for attacking monarchists as bigots and xenophobes has been appointed the Scottish party’s acting chief executive.

Carol Beattie, the former chief executive at Stirling council, was given the post by the SNP national executive on Saturday less than a day after Murray Foote, suddenly quit as the party’s chief executive.

Beattie sparked controversy after criticising an article about Kate Middleton’s return to public duties following her cancer diagnosis by claiming “intelligent people don’t support the monarchy”. Those that do, she added, “use them as symbols of their bigotry or xenophobic values”.

Her tweets emerged last month after Beattie stood as the SNP’s candidate for a byelection in Falkirk, which was held last week, only six months after she stood down as Stirling council’s lead official. The SNP has consistently stayed clear of republicanism, to avoid alienating pro-monarchy votes.

She said: “I apologise for any offence caused by the language I used and have removed the tweets.”

Keith Brown, the SNP’s deputy leader, said:

She brings considerable experience to the role and her appointment will continue the work, under John Swinney’s leadership, to ensure a professional, modern, dynamic election-winning organisation.

The SNP remains the dominant political force in Scotland, and Carol Beattie’s appointment will ensure we remain equipped for the tasks ahead.

Beattie narrowly lost the Falkirk South byelection to Labour’s Claire Aitken last Thursday. It had been called after the incumbent, Euan Stainbank, was elected as a Labour MP in July – the party’s youngest Scottish MP at 24.

Scotland uses proportional voting in council elections. In a signal that Labour support is being hit by the winter fuel payment cuts and the controversies over Keir Starmer’s clothes and glasses donations, Beattie gained the most votes in the first round of voting, 1,043 – 29 votes more than Aitken. Aitken took the seat in the seventh round of voting.

Craig Hoy, the Scottish Conservative chair, said:

The murky appointment of Carol Beattie highlights the level of chaos unfolding within the scandal-ridden SNP. Despite saying he would stay on until a permanent replacement was found, Murray Foote obviously couldn’t leave fast enough from the turmoil of the SNP.