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Employment Rights: Impact on Businesses
16 September 2025
Lead MP
Lincoln Jopp
Spelthorne
Con
Responding Minister
Kate Dearden
Tags
EconomyEmployment
Word Count: 8580
Other Contributors: 10
At a Glance
Lincoln Jopp raised concerns about employment rights: impact on businesses in Westminster Hall. A government minister responded.
Key Requests to Government:
The lead MP requests that the Government reconsider the measures in the Employment Rights Bill given their significant underestimated cost to businesses and potential detrimental effects on growth and employment. The Regulatory Policy Committee has stated that the impact assessment is not fit for purpose, suggesting insufficient evidence of an imbalance of power between employers and workers.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
Members across the House are aware that Spelthorne has 4,500 small businesses and major employers such as BP’s global headquarters. The Employment Rights Bill could cost businesses up to £5 billion annually according to the Government's impact assessment, which the Institute of Economic Affairs considers a considerable underestimate due to its failure to account for impacts on business costs and hiring.
Andy McDonald
Lab
Sheffield South East
The hon. Member for Sheffield South East questioned the impact of the Employment Rights Bill on business costs, as estimated by Labour's own assessment at £5 billion. Agreed with the Minister that workers in good jobs can contribute economically by spending money locally.
Harriett Baldwin
Con
West Worcestershire
Welcomed the Minister to her position, questioned how she reconciles falling payroll employment with Labour's mission for economic growth, citing recent labour market data showing a decline of 142,000 in payroll employment.
Euan Stainbank
Lab
Falkirk
Low productivity was a major feature of the last Administration, and low pay and insecure hours contribute to high turnover and sickness absence. The Employment Rights Bill addresses these issues.
Jim Shannon
DUP
Strangford
Small businesses are the backbone of the British economy, with 89.3% being micro-sized and having fewer than 10 employees. The Federation of Small Businesses says sickness absence costs an average small employer more than £3,500 a year.
Kate Dearden
Con
Staffordshire Moorlands
Responded to Steve Barclay regarding social care concerns, stating willingness to address specific interests and concerns.
Lincoln Jopp
Lab
The Chancellor promised the most pro-business Government ever, but at a CEO summit, not a single hand went up when asked how many CEOs thought it was true. The hon. Member for Redcar mentioned repairing the economy in her first year. Questioned the adequacy of impact assessments, citing concerns from the Regulatory Policy Committee. Fears the Employment Rights Bill will negatively impact the economy, leading to a decrease in employment for women and disabled people.
Rachael Maskell
Ind
York Central
Contrary to concerns about industrial action and employer-employee relations, good partnerships between trade unions and business can strengthen both sides. The new Employment Rights Bill will provide day one employment rights, improve statutory sick pay, end abusive practices like fire-and-rehire, and protect against exploitative zero-hours contracts.
Sarah Olney
LD
Richmond Park
The Liberal Democrats support measures to strengthen employment rights but are concerned about the lack of detail in the Employment Rights Bill, which prevents long-term planning for businesses. They urge the Government to scrap national insurance increases and implement reforms such as a youth mobility scheme.
Steve Barclay
Con
North East Cambridgeshire
My hon. Friend highlights flaws in the impact assessment and notes that the accumulation of different aspects of the Bill could lead to unintended consequences, such as easier strike action based on grievances. Asked about the additional costs and funding gap for social care due to the Bill.
Steve Yemm
Lab
Mansfield
Asked the hon. Member for York Central whether she agrees that strengthening statutory sick pay is particularly important for lower-paid workers who cannot afford to take time off work without it, emphasising its significance in contrast to Opposition Members' views.
Government Response
Kate Dearden
The Parliamentary Under-Secretary of State for Business and Trade
Government Response
The Minister emphasised the positive impact of the Employment Rights Bill on employers and workers, declaring a commitment to full consultation with stakeholders. She thanked her predecessor and acknowledged extensive engagement from businesses and trade unions in shaping the Bill. Stressed that stronger employment rights are an investment in stability and growth. Discussed economic benefits outweighing costs, with a top-end estimate of £5 billion but likely much lower at around £1 billion. Highlighted support from businesses and organisations like the Resolution Foundation. Emphasised protection for young workers, women, people with disabilities, and ethnic minorities. Outlines the importance of extending sick pay to 1.3 million employees and mentions stress, depression or anxiety accounting for 17.1 million working days lost in 2022-23, equivalent to more than £5 billion of lost output annually. Emphasises phased implementation and engagement with businesses, highlighting the Secretary of State's efforts to build partnerships with business leaders.
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Assessment & feedback
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About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.