Labour warned of ‘worrying’ business employment drop despite benefits reform: ‘It’s anti-growth!’

Labour’s approach to British businesses despite their benefits reform has drawn sharp criticism from Tory MP Helen Whately, who accused the Government of taking an “anti-business” approach.

The proposed changes to the benefits system will be a continuation of reforms introduced by the last Conservative government, the Shadow Work and Pensions Secretary has claimed.

However, she warned that businesses are now reconsidering their hiring plans, making it “much harder for people to get into work if the jobs aren’t there”.

“One of the things that I am worried about with the new government’s approach on this is, while the Secretary of State for Work and Pensions is talking tough about people getting into work, on the other hand we’ve just seen from the Chancellor an anti-business, anti-growth Budget,” Whately said.

Labour’s new benefits crackdown was unveiled as Sir Keir Starmer pledged to tackle what he called “the bulging benefits bill blighting our society.”

Writing in The Mail on Sunday, Starmer promised a zero-tolerance approach to those attempting to defraud the system.

However, the Prime Minister emphasised he would not “call people shirkers or go down the road of division,” promising instead to “treat people with dignity and respect”.

Whately detailed her concerns about the impact of Labour’s policies on business growth, saying she’s hearing from companies who are abandoning their expansion plans.

“I’m hearing from businesses saying they were planning to hire, they were expecting to grow their businesses, and now they’re not going to do that. That’s really worrying,” she told GB News.

She pointed out that these changes would make it more difficult to achieve the government’s employment goals.

The Shadow Work and Pensions Secretary acknowledged that some of Labour’s proposed welfare reforms appeared to continue Conservative policies introduced after the pandemic.

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“We saw coming out of the pandemic an increasing number of people who were not in work due to ill health, a big problem for the country,” she noted.

Whately launched a broader attack on Labour’s spending priorities, criticising their approach to public finances.

“These are political choices that the Chancellor and the new Labour government are making,” she said.

She specifically highlighted decisions to increase public sector pay “above inflation without requiring any productivity reforms” and investments in a British energy company.

The Shadow Work and Pensions Secretary urged the Chancellor to listen to businesses, noting their pre-election growth promises weren’t matching current actions.

“I’m talking to businesses who are absolutely distraught. How are they going to survive five years of a government behaving like this?” she questioned.

She concluded with a stark challenge to Labour’s competence: “Is it that this government is incompetent? Or is it that they hate business?”