Conservative MPs have called on ministers to abandon the Employment Rights Bill after Deputy Prime Minister Angela Rayner resigned at the weekend, saying the measures amount to an unnecessary burden on business and risk harming growth.
The legislation, which unions have praised as a "new deal for working people," is in its final parliamentary stages and is due to return to the Commons following amendments in the Lords. The Government's own impact assessment estimates the package could cost British businesses up to £5 billion a year.
Shadow business spokesman Andrew Griffith wrote to Business Secretary Peter Kyle urging him to scrap the Bill now that Ms. Rayner has left her post. Mr. Kyle has taken responsibility for the Employment Rights Bill as part of his new ministerial brief, prompting Tory calls for an immediate rethink.
"Rather than proceed with a measure which on the Government’s own impact assessment will reduce employment and growth, now is the time to put the national interest first," Mr. Griffith said in his letter. He urged ministers to "shelve" the Bill and to consider alternative measures to support growth and competitiveness.
The Bill includes proposals to strengthen employment rights from the first day of a worker's employment and to ban flexible zero-hours contracts. The measures have received strong backing from unions but drawn criticism from Conservative figures, with party leader Kemi Badenoch calling it a "war on the private sector."
Five major business organisations — the British Chamber of Commerce, the Confederation of British Industry, the Institute of Directors, the Federation of Small Businesses and MakeUK — wrote to peers in the House of Lords urging changes to the legislation. In their joint letter they warned the Bill carried "damaging implications for the Government’s priority growth mission," and urged improvements to protect business activity.
The Bill was named among achievements Ms. Rayner cited in her resignation letter. Ministers, business groups and trade unions are now contesting the Bill's fate as it moves back to the Commons for consideration of Lords amendments.
A government spokesperson reiterated that the Bill aims to improve protections for workers while balancing the need for a strong economy. Mr. Kyle has previously said the Government's priority must be to "double down" on growth, comments cited by Tory critics as a reason to pause or rethink the legislation.
Parliamentary timetables mean the Bill could still be amended or delayed as it completes its remaining stages. Any change in direction would require ministerial agreement and movement through the Commons and Lords, where peers have already sought to alter parts of the package.
The debate over the Employment Rights Bill underscores wider tensions within Westminster about how to balance worker protections with business competitiveness. With Ms. Rayner's resignation creating immediate political pressure, ministers face calls from opponents and some business bodies to reassess the measures before they become law.