Archie Norman, chairman of M&S, says the UK already has some of the “best terms and practices in the world” 39; Photo: Adrian Brooks/Imagewise
Chairman Marks & Spencer warned that the UK risks being unable to attract investment if Labor's election victory leads to an overhaul of workers' rights.
Archie Norman said the UK's biggest problem was the “lack of productivity growth and investment”. for this year's general election, with most polls predicting Labor to win a landslide.
Mr Norman said: “Any new government must carefully consider whether a package that reduces flexibility will help more expensive to hire people and seeks to bring unions back into the workplace and attract new investment.”
the former Conservative MP said the country already has “some of the best employers, conditions and practices in the world”.
He added: “Of course there are exceptions, but in a knowledge-based economy, most businesses place great emphasis on creating a motivated and engaged workforce.”
The Labor Party has promised to “strengthen workers' rights and make Britain work for the people” if it comes to power. This will include eliminating qualifying periods for full employment rights, getting rid of the gig economy and giving employees the right to claim unfair dismissal on their first day in a new job.
Labour is stepping up its charm offensive on business . leaders amid concerns that a lack of clarity on employment reform is preventing them from winning industry support.
Mark Carney, the former Governor of the Bank of England, and Barclays chief executive KS Venkatakrishnan are among the influential leaders now working with the party to attract billions of pounds of investment.
One Labor Party insider admitted that party officials “didn't do it.” have done a great job of making the workers' rights reforms clear to business.
They added: “This is a core part of our economic proposition, it's not something we want to hide in the closet.
“Investors still call us every week, those looking at IPOs want to know what we think. The idea that Labor could harm investment is just for the birds.”
Senior Labor Party officials are planning to meet major business lobby groups, including the Confederation of British Industry (CBI), in the coming weeks to discuss concerns about the rights of its workers. Reviews so far have been “mixed,” according to the insider.
Lobbyists are urging the Labor Party to approach its changes carefully. Rupert Soames, president of the CBI business group and grandson of Winston Churchill, warned against adopting a “European model” of employment and advised CBI members to “wake up, smell the coffee – this is the big thing that's coming to us.” /p>
Sir Keir Starmer said the Labor Party would overhaul the system on a scale that “hasn't been done in decades”.
Business leaders have raised the alarm over whether “day one” could effectively mean the end of the probationary period.
Alex Baldock, chief executive of electrical retailer Currys, told The Telegraph last month that he would “hatefully” see probation periods scrapped. He warned that Labour's plans risked “unintentionally making people poorer”, adding: “The more restrictions you put in place, the less flexibility you allow in the way businesses deal with their colleagues, the less likely businesses are to hire staff and the less likely it is that that they should invest.”
Labor is keen to deflect concerns and insists its changes will not end probationary periods and are intended to make workplace rights “fit for a modern economy”.
Jonathan Reynolds, the shadow business secretary, criticized the comments Mr Norman, criticizing the Conservative government for “running a high-tax, low-growth economy”.
He added: “Business leaders are not demanding a relaxation of workers' rights. They need the political certainty needed for long-term investment, stable corporate tax, business rate reform and action on late payments. That's what they'll get from Labour.”
Mr Norman's warning comes after years of stagnant business investment in the UK. From mid-2016 to the end of 2023, business investment grew by about 6% in real terms, according to official data. For comparison, in the US the growth was more than 25%.
The Office for Budget Responsibility (OBR) said last year that “uncertainty around the UK's future trading relationship with the EU, the pandemic, the energy crisis and rising after-tax costs of capital [were] all influencing investment decisions .”
He added that insufficient investment has a negative impact on labor productivity, which has grown to less than double its pre-crisis level since 2010. The UK lags behind France, Germany and the US in productivity.
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