U-turn on worker rights 'will save firms billions'

Labour watering down its overhaul of workers’ rights is expected to slash the cost of the plan for UK businesses by billions of pounds, the government’s own analysis shows.

- Richard Partington Senior economics correspondent

According to an updated Whitehall impact assessment published yesterday, concessions by ministers could cut the cost of the employment rights bill for businesses to about £1bn.

An earlier version of the document had suggested the package, which includes day-one employment rights and banning zero-hours contracts, could have cost firms up to £5bn.

In its revised analysis, the government said the new lower estimate reflected a decision to phase in the changes over several years, as well as “the fact that policy design and evidence have developed” since its last assessment, in October 2024.