Gail’s Bakery boss fears Employment Rights Bill may hit jobs

Jobs will be put at risk by Labour’s plans to impose more rules on companies when they hire staff, a leading businessman has warned.

Luke Johnson, chairman of the Gail’s Bakery chain, said the economy was in a ‘precarious’ state and putting additional regulations on firms, especially smaller ones, would deter them from hiring as costs rise.

‘Government talk a good game about growth. But the reality of what they are doing is the opposite. Unquestionably, this Employment Rights Bill will destroy jobs,’ Mr Johnson said.

He called on ministers to rip up the rules, which are making their way through Parliament.

Speaking to James Reed on the employment agency boss’s All About Business podcast, Mr Johnson added: ‘I would completely scrap the Employment Rights Bill… given the precarious conditions of the UK economy is not what job creators need.’

The comments come as businesses face a barrage of extra costs after measures unveiled by Chancellor Rachel Reeves came into force last month.

These included a 6.7 per cent rise in the National Living wage to £12.21 per hour alongside an increase in National Insurance Contributions from employers.

Mr Johnson, who was previously the boss of Pizza Express and currently sits on the boards of firms such as Revolution Bars owner The Revel Collective, said ever-increasing costs risked forcing entrepreneurs out of the UK.

‘Fewer people will want to start a business,’ he also told the podcast. ‘People will outsource or automate jobs, or they just won’t bother.

‘If you burden those risk-takers… and you tax them too heavily… eventually the talent will go.’

The Bill includes rights to guaranteed hours and flexible working. The Government has estimated the plans to expand workers’ rights will cost firms an extra £5billion a year.

Mr Johnson last year told MPs Labour’s proposals risked ‘crushing’ the private sector and that he feared some of his businesses would not survive.

There are already signs that firms are beginning to buckle under the pressure of rising tax bills, which will be made worse by the disruption caused by Donald Trump’s tariffs.

Restructuring experts Begbies Traynor last month reported that the number of companies in ‘critical’ financial distress rose by 13 pc in the first three months of the year.

It followed figures from the Government’s Insolvency Service that showed the amount of firms going bust in March rose by 9 per cent compared with the same month in 2024.

 Listen to Luke Johnson’s podcast