Experts’ warning to Rachel Reeves as she’s urged to ditch workers’ rights red tape or kiss goodbye to growth

RACHEL Reeves has been urged by experts to ditch the crippling workers’ rights red tape or kiss goodbye to growth by the end of the decade.

The Chancellor is facing calls to abandon extra bureacucracy such as greater protections on the first day of employment and easier for unions to gain workplace recognition.

The reforms, led by deputy PM Angela Rayner, have been heavily criticised by business over changes including sick pay and zero-hours contracts with the government analysis saying it could cost firms £5 billion a year.

It comes as the Chancellor also comes under pressure to reduce corporation tax – as she battles a new freebie row after taking tickets to watch Espresso hit maker Sabrina Carpenter.

But the Growth Commission is calling on Ministers to rip up the workplace proposals which will cause “untold and unseen damage”; by the extra burdens for business.

Expert Shanker Singham said: “The government should scrap its Employment Rights Bill which will pile additional burdens and costs onto already hard-pressed businesses.

“However well-intentioned, a law making it harder to fire people will also make it harder for small companies to hire the right people in the first place.

“Many small businesses will simply not be able to afford the demands of the Bill, which will likely lead to firms going under, in yet another blow for the economy.

“British workers’ rights are already good by international standards, and indeed surpass many of our global competitors in faster growing markets such as the US.

“The Government risks making the UK a relatively more unattractive place to build a businessandcreatejobs.”;

The rise in the national living wage will also cost business dear with changes coming in at the start of next month.

For workers over the age of 21, the rate will rise from £11.44 to £12.21 which is more than two thirds of median income.

But Lord Moynihan said the knock on effects will be “the people who suffer are young people”;.

He added: “It cements someone in their job if they already have it but it makes it very, very unattractive for an employer to hire a new person.”;

Leading experts are also demanding Ms Reeves reduce corporation tax from its current rate of 25 per cent to just 21 per cent to make Britain more competitive.

The rate was set at 19 per cent between 2017 and 2022 but has been at 25 per cent since 2023.

Meanwhile, Sir Keir Starmer appeared to back his Chancellor over her taking free tickets to watch Espresso hitmaker Sabrina Carpenter.

Number 10 said the PM “supports all of his ministers making their own judgments”; over hospitality and whether she had made the right decision.