BRC warns Employment Rights Bill could reduce retail jobs amid rising costs and slipping hiring

The British Retail Consortium warned that the Government’s Employment Rights Bill could lead to fewer jobs, not better ones, even as policymakers push to raise standards and fairness at work. The warning follows the latest ONS labour market data, which showed the unemployment rate creeping up to 5.1% in September 2025, a four-month high that underscores growing pressure on businesses as costs rise and demand fluctuates.

Across the economy, employers face higher costs and greater policy complexity, a mix that the BRC says is squeezing hiring plans and investment. In retail, which employs about three million people and anchors high streets across the country, the pressures are pronounced. On a four-quarter average, retail employment stood at 2.82 million in September 2025, 74,000 lower than a year earlier, and there are now about 355,000 fewer retail jobs than a decade ago. The sector’s distinctive, low-margin environment makes it particularly sensitive to cost shifts and policy changes, the group notes.

Helen Dickinson, chief executive of the British Retail Consortium, said the Employment Rights Bill represents an aspirational step to improve job quality and fairness but warned that parts of the bill could erode the flexibility on which many retailers rely. In remarks consistent with the BRC’s position, she said that measures which reduce flexibility, add complexity or increase costs without reflecting how businesses actually operate could end up reducing the number of jobs. The group also cited the Office for Budget Responsibility, which has warned that the bill could have a negative impact on employment, arguing that good employment policy should incentivise firms to hire, retain and train workers rather than deter them.

Retail’s cost pressures extend beyond the bill itself. Employers have absorbed recent increases in employer National Insurance Contributions and the National Living Wage, constraints that have narrowed the headroom to hire, invest and grow. Dickinson emphasized that growth requires a policy environment in which government and business collaborate as partners, not adversaries, to unlock investment and job creation.

The sector relies on a diverse, flexible workforce to meet shifting consumer demand, and the BRC stressed that reducing flexibility risks pricing workers out of the job market—particularly among students, parents and older workers who often rely on retail roles to enter or re-enter work. Alongside wage and tax considerations, the group pointed to the Apprenticeship Levy as a critical area for reform. While retailers contribute about £250 million annually, roughly half of that money goes unspent. The BRC argues that allowing greater flexibility in how levy funds are used would help retailers upskill staff across a broader range of roles, support progression at all career stages and bolster productivity, ultimately benefiting workers and the wider economy.

Yet the central question remains: how can policy balance protecting workers with maintaining a business-friendly climate that supports hiring? The BRC argues that the right approach would involve joint efforts between government and industry to unlock investment and growth. If reforms are misaligned with the realities of retail operations, the group contends, the result could be fewer opportunities across the economy, not the higher-quality jobs policymakers intend to create.

In the near term, retail businesses face a delicate trade-off between investing in people and managing cost pressures. The sector must navigate tighter margins, evolving consumer preferences, and a legislative framework that, as the BRC notes, can either accelerate or impede hiring momentum. The key, according to Dickinson, is to design policy that strengthens job quality while preserving the operational flexibility that keeps stores open, hours stable and rollouts of new services and roles feasible at the local level.

As policymakers consider the next steps, the BRC urges collaboration to translate ambition into real employment gains. The aim is not simply to create more jobs in name, but to ensure that the jobs available are stable, accessible and capable of supporting sustainable livelihoods. With retail continuing to anchor communities across Britain, the group argues that preserving flexibility and encouraging investment are essential to delivering growth and opportunity for workers, businesses, and the economy as a whole.