Small and medium-sized businesses are the backbone of the UK economy.
No less than two-thirds of all private sector employees are employed in this sector, which also accounts for more than half of commercial turnover.
It is no exaggeration to say that the creation of wealth and the future prosperity of our nation depends on their success.
This is why the Labour government’s first King’s Speech was so alarming, particularly the passages about expanding corporate regulation and workers’ rights through a plethora of onerous laws.
“We will shine a light on every workplace” as part of the quest “to create a new social order,” said Harriet Harman, then deputy leader of the Labour Party, in 2010, as she pushed through parliament her Equality Act, a sweeping state intervention bill.
The exact same words could be used about the Starmer government’s so-called “New Deal for Working People”, which was set out in yesterday’s King’s Speech.
The bill was originally drafted by Angela Rayner, the hardline deputy leader of the Labour Party and a trade union darling.
But responsibility for overseeing its legislative odyssey in Westminster appears to have fallen to Jonathan Reynolds, perhaps because, as a moderate, he is seen by Starmer as better able to gloss over the dangers inherent in the project.
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In truth, no amount of cover-up or deception can mask the damage that will be done to small and medium-sized businesses.
Behind all this optimistic rhetoric, this new agreement represents a mortal threat to private enterprise and jobs.
Far from improving workers’ rights, this measure will destroy their jobs and undermine their standard of living.
One of the main problems with the new government is that very few of its members have actually worked in the business world.
Before entering Parliament, most of them worked in the public sector, political research, voluntary organisations or trade unions.
In practice, the vast majority of them earned their living from taxpayers’ taxes rather than from their success in the market.
Angela Rayner herself is a classic example, as before entering parliament she was a civil servant with the large public sector union Unison, while Reynolds spent four years working as an MP’s assistant.
It is because they lack any real understanding of business that Labour politicians can propose measures that undermine competitiveness, increase costs and damage profitability by locking up workers.
This trend is clearly reflected in the desire to strengthen the protection of employees’ rights, which may seem laudable in theory but which, in practice, makes recruitment less attractive.
One of the drivers of job creation in modern Britain is the ‘gig economy’, whose flexibility benefits both business owners and employees.
This is why surveys show that the vast majority of employees welcome practices such as zero-time working or flexible employment contracts.
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But the Labour Party, trapped in its rigid trade union mentality, sees only capitalist exploitation and therefore plans to impose heavy restrictions on such contracts.
Under the new agreement, employees will receive comprehensive protection and support from day one in a new job, including rights to parental leave, holiday, maternity leave and access to employment tribunals.
Under Labour’s legislation, it will also become harder for businesses to resist homeworking and flexible working practices, even when they undermine efficiency or damage customer relationships.
Having taken control of the public sector, the cult of complaint and victimisation will tighten its grip on the private sector through a new equality law that will lead to even more time-consuming diversity monitoring and interventions by social justice commissioners, who find discrimination around every corner.
The workplace will become increasingly Orwellian, filled with surveillance exercises, racial sensitivity exercises, minority pay audits and affirmative action programs.
Labour claims that “stronger unions” are the key to more productive workplaces, but this is nonsense, as can be seen in the public sector, which is by far the most unionised part of the economy, but also the most sclerotic.
This is because unions protect outdated working practices, put the needs of the workforce before those of service users and weaken management’s ability to manage.
The Labour Party, still largely funded by the unions, is promising to repeal all anti-strike laws passed since 2010. The inevitable consequences will be further industrial action.
Yesterday’s King’s Speech gave a worrying insight into the Labour Party’s destructive, anti-business ideology.
New Chancellor Rachel Reeves keeps talking about the need for economic growth.
But it will achieve nothing if this bureaucratic and costly approach is implemented in its entirety.
John Longworth is an entrepreneur, businessman, chairman of the Independent Business Network of family businesses and a former Member of the European Parliament.
