Angela Rayner‘s radical plans to change workers’ rights are a ‘real risk’ to employment and the economy, small businesses have warned.
Firms fear that Labour’s proposed ‘New Deal for Working People’ will increase costs and risks – making it harder to get people into jobs.
Anything that increases the risk to businesses hiring staff will reduce access to entry level opportunities, undermining attempts to get worklessness down, they have said.
Research by the Federation of Small Businesses (FSB), shared exclusively with the Daily Mail, shows that 64 per cent of companies are already adopting more cautious recruitment practices as a result of the national living wage earlier this year.
It found employers are adopting a mix of strategies in response to April’s increase in the national living wage to £11.44 an hour, up from £10.42 for over 21-year-olds.
Firms fear that Angela Rayner’s proposed ‘New Deal for Working People’ will increase costs and risks – making it harder to get people into jobs
Employers have resorted to using a mix of strategies in response to April’s increase in the national living wage to £11.44 an hour, up from £10.42 for over 21-year-olds (Stock Image)
A quarter of small employers are now more likely to hire someone who had done the job before, and one in five are more wary about recruiting someone with a patchy work history – such as gaps on their CV, the survey showed.
A fifth of employers also said they were more likely to offer short-term contracts and more likely to seek to hire more experienced staff as a result of the wage increase.
Some 16 per cent said the national living wage rise meant they were more wary about recruiting someone who was out of work.
But Ms Rayner is planning a host of radical changes to workplace rights that go far beyond April’s national living wage rise, which firms fear would lead to higher costs.
She has pledged to remove the age bands for those in receipt of the national minimum wage, and to make sure it is a ‘real living wage that people can live on’.
Her proposals also include banning zero hour contracts, ensuring workers get regular hours for 12 weeks or more, giving workers a ‘right to switch off’ and making flexible working ‘a day-one right’.
The FSB said their research highlighted the ‘danger’ of increasing risk at the same time as costs and taxes are rising.
Rayner has pledged to remove the age bands for those in receipt of the national minimum wage, and to make sure it is a ‘real living wage that people can live on’
Tina McKenzie, FSB policy chairman, said: ‘The proposals in the ‘new deal’ plan are a real risk to employment, small business and the economy. There is understandable fear it will make it harder to get people into jobs.
‘It’s impossible to take a job if no one hires you. Increasing risk and costs on small businesses threatens to prolong the inactivity crisis and undermines any attempt to get worklessness numbers down.
‘Frozen tax thresholds mean employers are paying a lot more tax on jobs, just as the NLW has gone up by 9.8 per cent.
‘Hiking risk on employers by requiring formal dismissal processes from day one, and tying up things like casual bar work in mountains of red tape, deters small businesses from doing what they do best – getting people into work.’ The Government was approached for comment last night.