From the OBR’s Budget forecasts:
“We have previously not included an assessment of the potential economic impacts of the Employment Rights Act 2025 (ERA), given it was dependent on ongoing consultations and secondary legislation. We have made an assessment at this event, following the conclusion of most of the consultations and the implementation of various components of the reforms. Our analysis suggests that the ERA will likely have a negative economic impact from negative impacts on businesses, particularly through increased uncertainty, lost flexibility and higher labour related costs, which will more than offset any potential positive impact on worker productivity.”
But they don’t want to provide a figure:
“However, the size of the impact of the ERA is highly uncertain, partly due to the difficulties mentioned above in assessing the economic effects of regulatory policy. It is likely that the negative impact from the final set of reforms is substantially less than the initial policy proposals put forward in 2024 would have been. There is also still some uncertainty about the final policy design of the zero-hour contract related measures. However, overall, we judge there is currently not clear evidence that this negative impact is above our 0.1 per cent potential output threshold, so we have not made an explicit adjustment to our forecast. We will keep this judgement under review.”
And the labour market:
“We also expect the Employment Rights Act 2025 (ERA) to weigh on the labour market, in addition to previously announced policies including the increases in employer NICs and the National Living Wage.”
Not good…
Robert Jenrick told a rally on Monday:
“They say Chancellors are either undertakers or bookies. This one is an ostrich – and when the Chancellor buries his head in the sand, the rest of us, we’re left staring at his you know what.”