Labour policy ‘actively working against job creation', says Currys boss
The boss of one of Britain's biggest electricals retailers has criticised government policy for 'actively working against job creation' amid a raft of tax increases and looming worker rights reforms.
Writing in The Telegraph, Alex Baldock, the chief executive of Currys, said Labour risked making it 'harder, riskier and more expensive to hire people' as Angela Rayner prepares to implement the Employment Rights Bill, which is making its way through the House of Lords.
Mr Baldock said the retailer had already faced a 13pc overnight increase in the cost of employing part-time workers from Rachel Reeves's £25bn National Insurance raid, while its property tax bill also rose.
He said Currys was now facing 'new and counter-productive red tape in the shape of employment law changes'.
Mr Baldock added: 'Smart people know that changing your mind in the face of compelling evidence is a sign of strength, not weakness.
'It's not too late for the Government to change its mind on employment law changes that would lead to less employment.'
It comes amid growing warnings from bosses that the Government risks derailing its growth ambitions by piling higher taxes and more red tape on businesses.
In a recent poll by the Institute of Directors, a quarter of business leaders said the Employment Rights Bill made it likely that they would make redundancies.
Under the planned reforms, workers will be entitled to contracts with a minimum number of weekly hours baked in, giving them the same number of hours as they have worked in the recent past.
However, retail and hospitality chiefs have called for a rethink of the plans amid concerns that the changes risk stopping them from hiring extra people during crucial trading periods such as Christmas. Bosses have said they cannot afford to offer everyone more shifts all year round when stores are quieter.
Mr Baldock said businesses including Currys were 'ready to play our part in getting Britain back to work', adding: 'Enlist us in this cause, don't hammer us.'
In a House of Lords debate in April, Lord Wolfson, the boss of Next, said the employment rights reforms risked making it 'almost impossible for businesses to offer additional voluntary hours to workers' because they could then end up overstaffed at some times of the year.
Lord Wolfson said: 'There is a world of difference between tackling potentially abusive zero-hours contracts and eliminating the flexibility that legitimate part-time contracts provide to those who need and want them.'
The Government did not immediately respond to requests for comment. However, a spokesman previously said: 'We've consulted extensively with business on our proposals, and we will continue to work closely with employers to ensure new laws work for them while putting money back into the pockets of working people.'
By Alex Baldock, the chief executive of Currys
The Government talks a lot about growth and jobs, with plenty of warm words and encouragement for growth drivers such as high-tech manufacturing, life sciences and the creative industries. Next week, no doubt, these will be at the heart of theGovernment's new industrial strategy. And more power to such exciting sectors, where the UK enjoys a real competitive edge.
Yet the engine room of the British economy lies elsewhere. The likes of retail, leisure and hospitality may be less glamorous. But they employ 6m people – nearly a quarter of the private sector workforce – bringing prosperity and prospects to everycorner of the country.
They're no less innovative, either. Retailer productivity is growing at twice the national rate, as we deploy AI and other technology to improve customer service and empower colleagues. And boosting Britain's moribund productivity, as every economist will tell you, is essential for growth.
Nor are these retail and hospitality jobs just any jobs. They're great introductions (or re-introductions) to work. Once we've given colleagues this leg up, and as they gain in confidence and experience, we often find they progress rapidly, taking on more hours, moving into management or moving on to other work with our good wishes.
My first job as a spotty teenager was in a high street retailer (Waterstones in Newbury, as it happens), and I'm far from alone. Flexible and entry-level as they often are, retail jobs help people break into the world of work. They help those coming back after having children or caring for their elders – and, crucially, to those seeking a way off benefits.
It's crucial because of the UK's biggest domestic challenge today: the human and economic crisis of worklessness. The UK now has almost 1m 16-24 year olds not in employment, education or training, out of fully 3m people not in work because of physical or mental ill health. This is much more than pre-pandemic, and much higher than in other countries.
These 3m are exactly the people the Government wants to help off welfare and into work. This is the only way to reduce Britain's ballooning benefits bill, and so avoid further adding to an already punishing and growth-sapping tax burden. It's the only way to help millions of people find the fulfilment (and mental health benefits) of work. Research shows that the vast majority of them want to work – they just need the right opportunities and the right support.
'Everyone who can work, should work', says the prime minister. Where better for them to work than retail and hospitality? If not there, where?
It's not hard to connect the dots here. The country needs more growth and millions of new jobs. Retail and hospitality are where these are to be found. So, as well as lavishing goodies on the sexy growth industries, surely Government must be looking to help such big, high-employing, high-productivity sectors as retail and hospitality? If only.
In fact, government policy is actively working against job creation. Promised business rates 'relief' actually increased many bills. Punitive increases in National Insurance disproportionately hit employers who have many part-time workers. For example, the cost to Currys of employing such workers increased by 13pc overnight.
Now, and despite promised deregulation, we face new and counter-productive red tape in the shape of employment law changes. Retailers are busier at some times than others, as Saturday or Christmas, as shoppers will have noticed. So retailers need to flex up and down the number of colleagues on the shopfloor accordingly.
That works for colleagues looking for flexible work, for customers to get good service and for retailers to make an honest profit. But the Government's so-called 'guaranteed hours' proposals will force retailers to offer all colleagues the same number of hours as they've worked in the recent past – and pay for hours we don't need.
Even successful retailers such as Currys work on fine margins – we make £1.60 profit for every £100 we sell. We simply can't afford to pay for hours we don't need, especially now those hours cost more. The result will be that retailers have to hire fewer people. It's no wonder that the Retail Jobs Alliance expects over 300,000 retail jobs to be lost in the next three years – and those job losses have already started.
Thus government policy threatens the viability of the very jobs it sets out to protect, and this when the country desperately needs us to hire more people, not fewer. Where's the joining of dots here?
The frustrating part? Nobody doubts the Government's good intentions. There's much to praise in its long-overdue planning reforms and investment in decaying infrastructure, both essential for growth. The Government has shown it can listen to business when presented with reasoned arguments. For example, it withdrew ill-thought-through recycling proposals inherited from the previous government which would have had the perverse impact of reducing recycling. We welcomed that warmly.
Smart people know that changing your mind in the face of compelling evidence is a sign of strength, not weakness. It's not too late for the Government to change its mind on employment law changes that would lead to less employment. It's not too late to address the broken business rates system. It's not too late, instead of making it harder, riskier and more expensive to hire people, to do the reverse.
We all want more growth and jobs. Businesses like Currys stand ready to play our part in getting Britain back to work. Enlist us in this cause, don't hammer us. We could be doing so much more to help.
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