The recent legislation proposed by Labour, known as the ‘Make Work Pay’ policy, has come under fire from the Federation of Small Businesses (FSB). According to the FSB, this policy is rushed, poorly planned, and could have negative consequences for employment and economic growth.
The FSB criticizes the government for dropping 28 new measures on small business employers all at once, leaving them struggling to understand the implications. They argue that the policy lacks any real pro-growth elements and could lead to increased economic inactivity, putting the government’s employment target at risk.
One of the major concerns raised by the FSB is the plan to give day one unfair dismissal rights to new employees. This, they argue, will increase the risks associated with hiring new people and could deter small employers from taking on new staff, ultimately hindering job creation and investment.
The FSB also highlights the potential impact of the proposed legislation on small employers who often provide opportunities to individuals who are furthest from the labor market. They warn that the added employment costs could deter small employers from taking a chance on individuals who have been out of the workforce for an extended period, leading to increased social exclusion.
In response to these concerns, the FSB is calling on the Chancellor to add a pro-business, pro-employment element to the ‘Make Work Pay’ policy in the upcoming Budget. They suggest increasing the Employment Allowance and reintroducing the small business rebate for Statutory Sick Pay as potential solutions.
Additionally, the FSB urges the government to consider the needs of seasonal small businesses and struggling sectors like hospitality and tourism in proposals related to zero-hours contracts. They emphasize the importance of taking sufficient time to ensure that any new legislation is well thought out and does not have unintended consequences.
Overall, the FSB is calling for more engagement and consultation with small employers to ensure that their voices are heard in the development of new employment laws. They stress the importance of considering the impact on small businesses and the potential consequences for job creation and economic growth.
