Labour workers’ rights plan would cost business £41bn a year, Tories claim

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The Tories have claimed Labour’s workers’ rights plan will cost businesses £41 billion per year.

Analysis by the Conservative Party suggests that the flagship proposals – which it has dubbed “French-style union laws” – would set firms back £1,250 per employee per year, or a total of £205 billion over the next parliament.

It is based on a number of assumptions that have been rejected by Labour, including that the party would allow everyone who wants to work from home to do so. Labour has pledged to make flexible working a “day one right”, with employers required to accommodate this “as far as is reasonable”.

Labour has vowed to table the new laws, which would make it easier for staff to organise and join strikes and curb the use of zero-hour contracts, within 100 days of entering power.

Rachel Reeves, the shadow chancellor, has insisted it is not only “the right and the fair thing to do”, but also “good for the economy”.

Labour’s original plans watered down

But the proposals have proved controversial with businesses, with leaders warning the plans will damage investment, as well as a key point of contention with the unions, who have pressured Labour to hold firm.

The original package, unveiled by Angela Rayner, the deputy Labour leader, in 2021, has already been watered down, and the party is still wrangling over the specifics ahead of the election.

Union bosses have reacted angrily to suggestions that the offer could be softened further, warning both Ms Reeves and Sir Keir Starmer, the Labour leader, that there would be “significant anger” if they bowed to demands to weaken the proposals.

According to the Conservative Party’s analysis, the reforms would cost businesses £41 billion annually, or £205 billion over a five-year parliament.

It claimed that the measures costing £1,250 per employee per year would cost firms such as Tesco £375 million a year, which it warned could drive up food prices for families.

Richard Holden, the Conservative Party chairman, said: “Angela Rayner, backed by Sir Keir Starmer, is poised to ram through this new bombshell that will cripple small business and opportunities in order to appease their union paymasters if Labour win the election.

“Labour’s 70 new French-style union laws will cripple British businesses and, as ever, leave the public to pick up the bill.

“Only Rishi Sunak and the Conservatives have a clear plan, taking bold action on the economy to secure the future of business in the UK.”

Tories ‘have cut tax by £900 a year’

In response to Labour’s analysis, Gareth Davies, the Exchequer Secretary to the Treasury, said: “We have worked through a clear plan and taken bold action to drive inflation down to its lowest level since 2021. This has meant we have been able to cut tax for the average worker by £900 a year.

“Under Labour, inflation would not have fallen to 2.3 per cent because they opposed the difficult decisions taken to deliver it and wanted to borrow £28 billion every year. They now have a £38.5 billion black hole in their spending plans, which would fuel inflation and take us back to square one.

“The choice is clear: stick to the clear plan which is already working and helping people’s money go further. Or go back to square one with Keir Starmer and the Labour Party who will hit hardworking families with over £2,094 in additional taxes.”

‘They’ve costed a policy that isn’t ours’

But Labour rejected the findings, accusing the Tories of factoring a string of fabricated policies into their calculations.

A spokesman said: “This is absolute nonsense. The Conservatives have once again costed a policy that isn’t Labour’s.

“It is another desperate attempt to distract from their £46 billion unfunded tax plan – which will devastate family finances through higher taxes or the end of the state pension as we know it.

“It’s time to stop the Tory chaos, turn the page, and start to rebuild with this changed Labour Party.”

Labour has also published its own analysis suggesting that people are worse off under the Conservatives.

The party found that the typical household is now £5,883 poorer than it was in 2019, based on an increase in the energy price cap, the cost of groceries, motoring and mortgages, and both council and personal taxes.

According to Labour’s figures, mortgages contributed the biggest price hike – with a £2,880 rise on five years ago. This was followed by the cost of groceries, with an increase of £1,040.

‘Years of Tory chaos and decline’

Labour said the analysis “flies in the face of Rishi Sunak’s suggestion that the economy is turning a corner, with households impacted after years of Tory chaos and decline”.

Darren Jones, Labour’s shadow chief secretary to the Treasury, said: “Rishi Sunak’s economic failure has meant soaring costs for regular expenses leaving families almost £6,000 worse off since 2019, while he personally has become richer than the King.

“The Labour Party has changed, but once again it is the Conservatives that haven’t learned any lessons and are ploughing ahead with a Liz Truss-style £46 billion unfunded tax plan to abolish national insurance. Britain can’t turn a corner with the people who drove us into a dead end in the first place.

“The only way to turn the page on this decline is by voting for change at this general election. The Labour Party will deliver the economic stability that can underpin keeping taxes, inflation and mortgages low while finally getting growth back into our economy.”

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