Retailers warn Employment Rights Bill could curb hiring as UK unemployment rises, BRC says

The British Retail Consortium warned that the Employment Rights Bill, which has just cleared the Lords, could mean fewer jobs rather than better ones as the latest labour market data show a slowing economy and rising costs affecting hiring.

Helen Dickinson, chief executive of the BRC, described the new data as alarming. She said that when the economy is growing, demand is up, confidence to invest rises, and jobs follow. But with unemployment at a four-month high of 5.1%, Dickinson warned that policy risk undermining the ability of businesses to hire and invest.

Retail remains the UK's largest private-sector employer, but the sector faces growing strain. The Office for National Statistics data show that retail employment on a four-quarter average stood at 2.82 million in September 2025, 74,000 lower than a year earlier. That decline is not an anomaly: there are now about 355,000 fewer retail jobs than a decade ago. Retail provides a first job or flexible work across communities, but the opportunities are slowly being eroded as costs rise and margins stay tight.

The sector sits at the heart of the high street, with many independent stores and chain outlets alike feeling the squeeze from higher costs. Employers are still absorbing recent increases in employer National Insurance Contributions and the National Living Wage, which have reduced the headroom to hire, invest and grow with confidence. Higher costs translate into decisions about hours, roles and expansion plans, and over time can suppress job creation, particularly in towns where retail is a major employer.

While the Employment Rights Bill contains provisions to strengthen worker protections and fight bad practices, the BRC cautions that some parts could reduce flexibility or add costs without reflecting how businesses actually operate. The Office for Budget Responsibility has warned the bill could have a negative impact on employment, a finding Dickinson said should give policymakers pause as they seek to balance fairness with growth.

Skills policy is also central to the growth equation. Retail’s needs are evolving toward digital skills, logistics know-how and stronger leadership. Yet the Apprenticeship Levy remains rigid, with about half of the roughly £250 million annual levy going unspent despite a pressing need to upskill. Dickinson called for reforms to allow greater flexibility so retailers can invest in a broader range of high-quality training and support progression at every career stage, which would help raise productivity and support the broader economy.

There is a path forward. The BRC argues that, with the right approach, government and business can work together to unlock investment, jobs and growth. Policies should be crafted with input from those who run and employ businesses rather than imposed from above, the group says, and reforms to the apprenticeship levy could broaden the scope of training that supports workers from entry to leadership roles. Retail, and business more widely, stand ready to partner with government to deliver the growth the UK urgently needs.