The chairman of Gail's, Luke Johnson, has expressed stark concerns regarding the survival of some of his ventures under the proposed Labour government policies, particularly criticising the imposition of extensive new workers' rights on the private sector. Speaking before the Employment Rights Bill committee, Johnson, a prominent entrepreneur known for his previous leadership of Pizza Express and now a director and co-owner of multiple companies that employ around 10,000 individuals, commented on the potential impact of the forthcoming legislation.
Johnson articulated his apprehensions by stating, "Even if we don't suffer a technical recession next year, it's odds on there will be a serious slow down. In some cases, some of my companies might not survive next year." He warned that insolvency specialists may benefit from an expected rise in company collapses, highlighting what he describes as a “death by a thousand cuts” scenario for the private sector. He further noted, “If you crush the private sector, you crush jobs," emphasizing the fundamental role that successful businesses play in sustaining employment.
Among Johnson’s various commercial interests are investments in a diverse range of sectors, including fashion with brands like Zoggs, hospitality through Giraffe restaurants, and leisure with ventures like All Star Lanes. He is also affiliated with the Brighton Pier Group and Revolution Bars.
The remarks come in light of Labour's comprehensive overhaul of workers' rights, which includes more than 70 proposed measures aimed at enhancing employee conditions and amplifying the influence of trade unions. Key components of this legislation involve repealing exploitative zero-hours contracts, implementing day-one rights for paternity and parental leave, and establishing flexible working arrangements as the default where feasible.
The Government has estimated that this reform could incur costs of up to £5 billion annually for businesses; however, the Regulatory Policy Committee (RPC) has suggested that this figure warrants clarification due to its potential inaccuracies. Johnson further cautioned that smaller enterprises might struggle to cope with the financial burdens and the extensive bureaucratic requirements associated with the legislation. He remarked, "The idea that companies that can barely afford any form of HR could stomach a big new bill of 150 pages in 28 measures – they won't even have time to read it."
The timing of the proposed employment bill, arriving shortly after Labour's first Budget, has been described by Johnson as “beyond belief.” He underscored the reality that job creation is inherently linked to the risk-taking endeavour of entrepreneurs, stating, “Jobs don't just fall from the sky – they appear because companies are created by risk takers.”
Further scrutiny of the new measures has emerged from the RPC, which has deemed several individual impact assessments insufficient. This includes concerns that the financial implications of agreements related to adult social care pay might greatly exceed the previously projected costs. The committee acknowledged that employers might mitigate regulatory costs through wage adjustments and other measures, potentially impacting employees directly.
Business groups have also echoed Johnson's concerns. The Federation of Small Businesses remarked that the RPC's findings presented a “sharp wake-up call” for ministers, urging a reevaluation of the implications that such legislation could have on small businesses. Policy chairman Tina McKenzie was quoted saying, "The country cannot afford to pile further cost and risk on to small employers based on such an overwhelmingly weak evidence base."
In response to the growing backlash, government representatives maintained that the "initial indicative assessments" serve as a preliminary estimation of the potential impact of the legislation, with a commitment to refine the analysis and conduct further evaluations as required.
Source: Noah Wire Services