Labour’s Unemployment Bill to deliver £8.3 billion economic blow and destroy 326,000 jobs

The Conservatives are today [Wednesday 5 November] calling on Labour to withdraw their so-called Employment Rights Bill as new research shows it will land a crippling blow on Britain's struggling economy and jobs market.

MPs are voting today on House of Lords amendments intended to mitigate the worst impacts of the Bill. If it passes unamended, the Bill will hit economic output to the tune of at least £8.3 billion and could lead to at least 326,000 job losses, new Conservative analysis has revealed.

The Bill will result in 108,000 years' worth of lost output and increase welfare costs by £521 million as newly jobless workers join the long queue to claim benefits.

These impacts will make the Bill one of the most economically disastrous pieces of legislation in recent memory. It will compound the damage done by Rachel Reeves' tax hikes on businesses which have already forced thousands to close, driven unemployment up by 150,000 since the Budget and made ever more people reliant on welfare at the taxpayer's expense.

It is another example of the terrible decisions the Labour government have made which will damage productivity. But it is little surprise when just one member of the Cabinet has started their own business and understands how industry works.

On Tuesday, Kemi Badenoch called on the Government to get Britain working again, including by removing key barriers to employment. She urged them to withdraw the Unemployment Bill and instead present legislation that protects workers without holding back growth, slashing employment opportunities, or punishing good employers. 

So far, Labour have lacked the backbone to admit their mistakes, confront their trade union paymasters and do what is best for the country by killing the Bill. But it isn't too late.

Andrew Griffith MP, Shadow Business and Trade Secretary, said:

“Labour's Unemployment Bill is set to cripple economic output and cost 326,000 people their jobs and livelihoods.

“Businesses are already reeling from the Jobs Tax and rising prices delivered by Rachel Reeves. This Bill threatens to worsen their pain by hiking costs and facilitating widespread strikes. 

“Labour should listen to the overwhelming calls from business, stand up to the trade union bully boys and withdraw this Bill before it can wreak economic havoc. Otherwise, the impact on families will be disastrous.

“Only the Conservatives will give businesses the environment to grow, provide good jobs and deliver a stronger economy.”

ENDS

Notes to Editors

The Bill will lead to 326,000 redundancies:

According to the Institute of Directors (IoD), 23 per cent of employers will be more likely to make redundancies because of the Employment Rights Bill. This is a low-end estimate with a CIPD survey finding 30 per cent will make redundancies, a Federation of Small Business survey finding 32 per cent will and a Confederation of British Industry/Pertemps survey finding 27 per cent will (IoD, Press Release, 6 June 2025, link; CIPD, Report, April 2025, link; FSB, Press Release, 6 January 2025, link; Pertemps, October 2025, link)

According to the Department for Business and Trade, there are 1.418 million private sector employers in Britain in 2025 (DBT, Official Statistics, 2 October 2025, link).

Applying the IoD statistic that 23 per cent of employers will be more likely to make redundancies because of the Employment Rights Bill to business population statistics, there are 326,000 employers more likely to make redundancies because of the Employment Rights Bill.

Applying a low-end assumption that each business will make one employee redundant because of the Bill, we can assume that 326,000 individuals will be made redundant because of the Employment Rights Bill.

The Bill will increase welfare costs by over £500 million:

Individuals on Universal Credit aged over 25 receive £400.14 per month (GOV.UK, Universal Credit, accessed 31 October 2025, link).

The average individual takes four months to get a new job. During this period the vast majority of them will be eligible to receive welfare equivalent to £1,600.56 (Stand Out CV, accessed 31 October 2025, link).

Applying the statistic that 326,000 individuals will be made redundant because of the Bill, we can assume that welfare payments of £521.8 million will be made.

This is a low-end estimate as it assumes that all of those made redundant will go on to find a new job and not become long term unemployed. Currently, one in six individuals on Universal Credit have been searching for a job for 18 months or more (DWP, Official Statistics, 19 April 2024, link).

The Bill will lead to 108,000 years of working time being lost:

According to Stand Out CV, a recruitment website, the average individual spends 122 days (four months) searching for a new job (Stand Out CV, accessed 31 October 2025, link).

Applying the statistic that 326,000 will be made redundant because of the Employment Rights Bill to job search times, we can assume that 39,772,000 working days (108,964 years) will be lost because of the Bill. This is a low-end estimate as it assumes all individuals made redundant will re-enter the workforce without displacing other labour.

The Bill will cripple economic output:

According to the Office for National Statistics, the average output per worker in 2024 was £76,401.91 (ONS, Output per worker, UK¸ 14 August 2025, link).

Applying the statistic that the Employment Rights Bill will lead to the loss of 108,964 working years to annual output per worker, the economic output loss from the Employment Rights Bill solely from the unemployment it causes will be £8.3 billion.

This is a low-end estimate because of the statistics used to create it were low-end estimates.

Labour do not have business experience:

Just one member of the Cabinet has started their own business and less than half of it have worked in the private sector. Of the 32 members of the Cabinet, just one, Emma Reynolds, has started a business (Conservative Research Department Analysis, 4 November 2025, available on request)