Employment rights bill will cost firms £5bn per year but benefits will justify costs, government says – as it happened

• Angela Rayner, the deputy prime minister and housing secretary, has said the employment rights bill will be good for growth. Speaking during the opening of its second reading debate, she said an impact assessment published by the government today (see 3.48pm) made it clear the bill would have “a positive impact on growth and more than 10 million workers will benefit from Labour’s plan in every corner of this country”. She went on:

And the money in their pockets will go back into the economy and will support businesses, in particular, those on the high street.

But many Tory MPs pointed out that the official analysis said the impact of the bill on growth was uncertain, and that even if there was a positive effect, it would be small. (See 4.41pm.) They also highlighted figures saying the cost to business could be close to £5bn a year.

• Keir Starmer and Wes Streeting have launched a consultation on the future of the NHS. (See 9.13am.) In a post on social media, Streeting joked about some of the less serious responses already submitted.

Thanks to @JackElsom for sending this idea for Wetherspoons in every hospital.

Great idea, but sadly vetoed by the Chancellor during Budget negotiations.

Thanks also to the person who suggested I be fired out of a cannon to raise money for the NHS. No

• The Serious Fraud Office is investigating the construction of a hotel and conference centre owned by the Unite union, the BBC is reporting.

Wes Streeting, the health secretary, has said that the government’s anti-smoking bill will be “more ambitous” than the version introduced by the Conservatives before the general election.

Rishi Sunak’s government published a tobacco and vapes bill that would have banned anyone born after 1 January 2009 from legally smoking by gradually raising the age at which tobacco can be bought. It did not become law because it ran out of time.

Labour supported the Sunak bill, and in the king’s speech it promised to revive it. But Streeting is now considering using it to ban smoking in some outdoor public spaces, like pub gardens.

In an interview earlier today, Streeting said the bill will be published before Christmas. He went on:

When the smoking bill is introduced, it will be more ambitious than the bill introduced by the previous government.

James Cleverly, the shadow home secretary, has claimed that that the decision to give Taylor Swift police protection for concerts in London will encourage foreign VIPs to demand the same treatment.

Speaking during Home Office questions in the Commons, Cleverly said:

Having been home secretary I have on numerous occasions had to deal with a request from foreign VIPs for a level of protection that they demanded or requested but that we did not feel was appropriate.

Does [the minister] recognise the difficult position that she has put her own foreign secretary into when those future requests come in and they have to be denied? When those individuals will pray in aid the protection package put in place for a rockstar.

Jess Phillips, the Home Office minister who was responding to the question, defended the Swift decision, saying that her concerts were “cancelled in Vienna because of a terror threat that the CIA identified could harm tens of thousands of people”.

Cleverly also repeated Tory claims that the Metropolitan police gave Swift an escort only because of pressure from ministers, and that ministers got free concert tickets as a thank you. Ministers have rejected these claims, saying ultimately the Met had the final say over a police escort.

Referring to the role Swift’s mother was said to play in the negotiations with the Met and the government, Cleverly said:

After the appalling results from recent negotiations with the BMA, the RMT and Mauritius, has [the minister] considered recruiting Taylor Swift’s mum as a government negotiator?

Phillips said she would like to see Swift’s mum standing to be next Tory leader, because she would “really offer something that is not currently available”.

Angela Rayner, the deputy PM and housing secretary, is opening the debate on the employment rights bill. She said the impact assessment published by the government today says the legislation will be good for growth.

But, in an early intervention, the Conservative MP Graham Stuart said that document just said the measures might be good for growth. And, if there was a postive impact on growth, it would be small in magnitude according to the document, Stuart said.

In the executive summary of its economic analysis, the government says:

We conclude the package could have a direct and positive impact on economic growth, but we expect this to be small.

And here is the more considered conclusion, from paragraphs 168 and 169.

On balance, we believe the impact on growth could be positive (i.e. the positive channels above outweigh the offsetting effects) but the direct impact would be small in magnitude. This is because the package is well targeted at low-paying sectors meaning that many of the channels covered above are less applicable for a large part of the economy. In addition, the evidence between employment rights and growth in the UK is limited, but where we do have strong, policy-specific evidence it often indicates that the policy has had a negligible effect on growth. For example, the national living wage, which has imposed a similar magnitude of costs on a similar part of the labour market in recent years as we expect the bill to have, has had a limited impact on productivity and participation (and by extension growth) in either direction. It is right that there is evidence linking flexible working to stronger productivity and this change will boost productivity for some workers and some employers, but the increase in uptake of ‘making flexible working the default’ is relatively small compared to the number of people employed and therefore, at a macroeconomic level, the impact on average productivity will be small.

Whilst we conclude that the direct impact would be small, it is likely that by boosting protections and the quality of work for the poorest in the labour market, the package will enhance lower-paid workers’ share in the benefits of growth and boost equality in work. This is more than just good for equality; it could be good for the economy too as there is evidence that equality is important for ‘sustainable’ growth over the long-term. For example, the OECD note that higher inequality can lead to underinvestment in human capital and weaker adoption of technologies. They estimate that as a result of rising inequality between 1990 and 2010 output in the UK was almost nine percentage points lower than it could have otherwise been. As a result, by increasing the security, quality and equality of work, it’s possible that the bill could also indirectly support the government’s mission to grow the economy beyond a small direct impact, helping to raise living standards across the country.

Suella Braverman forwarded government documents to her private email accounts on at least 127 occasions when she was attorney general, according to a story by George Greenwood at the Times.

The Attorney General’s Office disclosed the figure after a lengthy Freedom of Information battle culminated in a tribunal finding against the government. Braverman, who became home secretary after serving as attorney general but who was sacked from the Home Office for sending a government document from her personal email address, did not respond to a request from the Times for comment.

Greenwood said that sending documents to her personal email address when she was attorney general may have been a breach of the ministerial code. He says:

A Freedom of Information request submitted by The Times has now revealed that [Braverman] was forwarding such correspondence routinely while serving as the government’s top legal officer between 2021 and 2022. The 127 emails had at least 290 documents attached.

Ministers are banned from sharing sensitive emails and documents about government business with their private accounts because weak security provisions put them at greater risk of unauthorised access.

It is not known whether Braverman forwarded sensitive or official documents to her personal account. The Attorney General’s Office (AGO) did not respond to a request for comment.

The Department for Business and Trade has said the benefits of the employment rights bill will justify the costs it will impose on business amounting to nearly £5bn per year.

It has set out this assessment in an economic analysis of the bill, published alongside 24 regulatory impact assessment setting out the direct costs of the measures included in the legislation.

The bill, which is getting its second reading in the Commons this afternoon, has been described as “the biggest overhaul of workers rights in generations”. It will significantly strengthen workers’ rights.

In its economic analysis, the government says that some of these new regulations will impose new costs on business.

We expect the policies covered within the bill to impose a direct cost on business equivalent to low billion pounds per year. If we take the top-end of the range from our broad order of magnitude cost to business estimates in tables A3, A4, and A5 to get the maximum likely cost this sum to £4.5bn [sic]. As such, we are confident that the total direct cost to business will be less than £5bn annually. This represents a cautious assessment, and we expect the total cost to business to be refined downwards as our evidence improves and the policy development continues

Nevertheless, to contextualise the size of this impact, total wage costs in the UK were £1.3 trillion in 2023 in nominal terms, meaning that an annual cost of up to £5bn is equivalent to an uplift of the UK’s total pay bill of up to 0.4%. This cost will be concentrated on employers in lower paid sectors, but even if we assumed all of this cost falls on such sectors, then hypothetically the equivalent uplift in the wage bill for that part of the economy would be up to 1.5%.

The report says the empirical evidence about who would pay the cost of stronger employment protections is “ambiguous”. It says firms might pass on higher costs to customers. If they cannot do that, they might cut investment or training costs, or cut employment costs, it says.

But the report says giving workers more rights will cut the number of days lost to stress, depression and anxiety, which it implies will more or less compensate for the increase in direct costs. It says:

There will be further benefits for those in work from better job satisfaction, as well as improved wellbeing and health, which could be amount to billions of pounds a year. This will benefit their employers too as 17.1 million working days were lost due to stress, depression or anxiety in 2022/233 , equivalent to over £5bn of lost output.

And the report says, overall, the impact of the bill will be positive.

There are clear, evidence-based benefits of government action through the bill. Not acting would enable poor working conditions, insecure work, inequalities and broken industrial relations to persist.

The bill will strengthen working conditions for the lowest-paid and most vulnerable in the labour market, increasing fairness and equality across Britain. It will have significant positive impacts on workers who are trapped in insecure work, face discrimination, or suffer from unscrupulous employer behaviour like ‘fire and refire’ practices. [See 2.52pm.] Many policy changes in the bill will target the issues identified by the independent Taylor review of modern working practices.

Workers in adult social care, those covered by collective bargaining agreements, those grieving a loss of a loved family member, and those struggling to make work fit in around other commitments will also be notable beneficiaries …

The package will be significantly positive for society (i.e., the benefits will outweigh the costs) if policy implementation is well-targeted, and the risks of unintended consequences are mitigated through consultation and policy design. We intend to refine this assessment as policy development continues.

Diane Taylor

Inspectors have raised serious concerns about the care provided to child asylum seekers who arrive in the UK on small boats, including babies who have had their fingerprints scanned and lone children left to sleep on mats on the floor.

A report published today by HM Inspectorate of Prisons on short-term holding facilities in Kent, including Manston, Western Jet Foil and two Kent Intake Units, found that overall there had been improvements and improved management of new arrivals.

However serious concerns are flagged about the welfare of the new arrivals, especially children.

Detainees are given wrist tags with QR codes and fingerprints are repeatedly scanned including babies. The Home Office did not always keep correct records of the length of time people were detained, with one person held for 106 hours incorrectly recorded as detained for 51 hours. New arrivals are supposed to be held for a maximum of 24 hours.

One ten year-old Afghan boy asked for a phone so he could call his mum but was told that would not be possible while a 15-year-old girl who said she had been sold to traffickers was interviewed without an appropriate adult. Some Border Force staff and cleaners working on the frontline had not been DBS checked and one contractor was sacked for aggressively pulling a sleeping child to their feet and making disparaging comments to them.

There were examples of children being woken up at night to be interviewed with one child interviewed at 1.20am.

Inspectors said that at Kent Intake Unit in Dover some of the lone child arrivals were very young ‘and had obviously been fitted on arrival with wrist tags with QR codes”.

Workers in some of the lowest-paid and most insecure jobs could gain an extra £600 a year from the measures in the employment rights bill being debated later, the government claims.

In a news release, the Department for Business and Trade says:

Poor productivity, insecure work, and broken industrial relations have been holding back the British economy for too long. Last year the country saw the highest number of working days lost to strikes since the 1980s – costing the economy millions of pounds. This has entrenched a culture of brinkmanship that only serves to damage public services, public finances, and public faith in institutions. Today is a significant step in putting an end to that – as the Employment Rights Bill reaches its second reading, alongside a package of consultations to help inform its next steps. This includes a consultation on our new approach to Statutory Sick Pay, where the Bill will be removing the waiting period and the Lower Earnings Limit.

The Bill is expected to benefit people in some of the most deprived areas of the country by saving them up to £600 in lost income from the hidden costs of insecure work. Around 2.4 million people in the UK work irregular patterns like zero or low hours contracts or agency jobs, where insecure hours can mean forking out on expensive childcare or transport to cover last-minute shifts – or losing out altogether if work is changed or cancelled at short notice.

New protections like guaranteed hours and giving reasonable notice or compensation for lost work will help shift workers keep up to £600 a year, including workers in the North and Midlands where irregular work is highest.

For a cleaner working night shifts on an average annual wage of £21,058, a £600 saving would be worth over £250 more a year than the last two national insurance cuts.