Businesses are concerned about the aggregate cost of changes to workers’ rights and the cumulative impact of Budget measures, MPs have been told.

The committee of MPs scrutinising the Labour government’s employment rights legislation took evidence from business groups, industry representatives and trade unions on Tuesday.

And they were warned the combination of reforms to employment law and regulation – alongside changes announced in the Budget to employers’ national insurance contributions (NICs) risk a chilling effect on hiring. 

Allen Simpson, from UKHospitality, said he was concerned about the “aggregate cost” in addition to the NICs hike and the rise in the national living wage (NLW) posing a “barrier to employment”.

He told the panel: “The bigger impact was the Budget… there are certainly going to be job losses as a result. We should expect that those job losses will heavily weigh on those people who are on the minimum wage.

“Hospitality will bear a disproportionately large number of that, for sure.”

Alex Hall-Chen, from the Institute of Directors (IoD), said: “A key fear for us is the cumulative impact of all the 28 reforms in this bill coupled with everything else happening in the employment space so far, and that taken as a whole the measures make hiring someone riskier and more expensive for businesses.

“Our research has shown that as a result businesses will hire fewer people.”