Andrew Griffith: Today’s debate is Labour’s last chance to fix its disastrous Employment Rights Bill

Andrew Griffith MP is Shadow Secretary of State for Business & Trade and Conservative MP for Arundel & South Downs.

Whilst Budget speculation is for now just that, Labour’s Un(Employment) Bill is real today and is a clear and present danger to the UK’s economic fortunes. As the Official Opposition, it falls to the Conservatives this week to once again oppose one of the most consequential pieces of legislation for a generation of job seekers.

Last week the House of Lords – led by Conservatives but with cross bench support – delivered a firm rebuke to the Government, passing five key amendments by substantial majorities and putting the ball firmly back to the Commons. It’s a good example of how we Conservatives are finding effective ways of working in opposition and how, for all the media love of novel parties and their soundbites, it is Conservative MPs and Peers who are doing the hard yards.

The Employment Rights Bill (or, as many in business now call it, the Unemployment Bill) is a 330-page charter for red tape that threatens to throttle job creation, drive up costs and embolden the trade unions whose militancy once brought Britain to its knees.

At a time when the British economy is already flatlining – with growth stagnant, unemployment rising, and inflation nearly twice its target – this Bill could hardly be more ill-timed. According to the independent Growth Commission, its impact on productivity and hiring will shave between 1.4 and 2.8 per cent off GDP within a decade, the equivalent of up £1,000 for every man, woman and child in the country. Far from ‘making work pay’, it risks ensuring that fewer Britons have work at all.

The Government’s own impact assessment acknowledges a direct cost of £5bn to business. However, the most destructive impacts of this Bill will be seen in the long-term chilling effect on hiring. Vacancies only exist when there is flexibility and confidence, and yet these are the very things these 330 pages of red tape target.

Consider Bill’s headline measure, “day-one rights.” Under Labour’s proposals, every new hire would be entitled full unfair-dismissal protection from the moment they walk into their new workplace – meaning that an employee could, quite literally, file a tribunal claim before finishing their first day’s induction. With close to half a million claims already gumming up the Employment Tribunal system, and hearings taking up to two years in some regions, the prospect of yet more vexatious cases will make the more cautious employers think twice about recruiting anyone at all.

For that reason, business groups from the CBI and Institute of Directors to the Federation of Small Businesses and UK Hospitality have pleaded to the Government for common sense. One cross party amendment on the table will restore a six-month qualifying period. Of course, this is still a generous reduction on the current two years, but long enough for a firm to judge whether a hire is a good fit before facing legal exposure. Regrettably, Labour ministers refused even that compromise.

But this isn’t just about dismissal law. Deep in the Bill’s dense text are new measures straight out of the Scargill playbook that would abolish the 50 per cent turnout threshold for strike ballots, handing trade-union “roaming rights” to enter workplaces on a weekly basis, and channel workers’ subscriptions into party political funds unless members actively opt out in what is effectively a subscription trap.

Let’s be honest, these are not the priorities of a government serious about growth. The reality is they are the demands of the TUC and Unite whose fingerprints cover this legislation from cover to cover.

In effect, this Bill drags Britain back towards the labour-market sclerosis of 1970s. Spain, whose unemployment rate today (over ten per cent, twice Britain’s) demonstrates exactly what happens when rigid employment rules deter hiring and protect insiders at the expense of those seeking their first job. And most regrettably, it will be young people and vulnerable workers who suffer most as firms scale back recruitment or automate or offshore instead.

Despite all of the warning signs of economic catastrophe, ministers persist in claiming that this is about fairness or modernisation. Ask yourself: fairness to whom?

Not to the small business owner in Worthing or Wigan who, already reeling from higher business rates, National Insurance increasing and the packaging levy, must now budget for another £800 per employee in new compliance costs. Nor to consumers facing higher prices in the weekly shop as firms pass on those costs, and certainly not to the millions who depend on dynamic, growing businesses to create jobs and fund public services.

It’s no wonder we see a flood of Britain’s best and brightest now literally fleeing these shores, and it is telling that even the Resolution Foundation, the finishing school for young Labour apparatiks, has warned that “day-one rights” risk crippling the job market and discouraging firms from hiring altogether. When your own ideological allies are pleading with you to stop, it should be a moment for reflection.

Labour’s rhetoric on “cutting red tape” is ringing ever more hollow. The Chancellor may talk about unleashing enterprise, but her actions tell another story. Every week seems to deliver a new consultation, a new regulator, or a new tax pinch that punishes risk takers and rewards idle dependency. The result is a steady trickle of entrepreneurs and investors fleeing our shores, taking their talents elsewhere.

Today’s debate in the Commons offers one last chance to slam the brakes on this disastrous Bill. MPs of all sides should hear the overwhelming consensus of employers and accept these amendments before generational harm is done: keep the six-month threshold, retain the 50 per cent strike ballot rule, ensure union funds are voluntary, not automatic.

We desperately need policies that reward enterprise, attract investment and get our economy growing again. The path to prosperity is not through more regulation, but through trust in the small businesses and job creators who are the backbone of this country.