Your commercial news round-up: workers’ rights, construction, pubs, Marks & Spencer

Reading time: four minutes

Have you been keeping up with the commercial news this week? Changes to the Employment Rights Bill will cut costs for businesses by billions, according to a new impact report. Meanwhile, figures show that the UK construction industry is struggling, Labour MPs are calling for the prime minister to rethink changes to hospitality funding and Marks & Spencer experienced disappointing Christmas fashion sales as it continues to feel the fallout from last year’s cyberattack. Read on for more!

• A number of changes to Labour's workers' rights reforms are set to cut adoption costs by billions, according to a new government impact assessment. An initial analysis found that implementing the new Employment Rights Act could cost businesses up to £5 billion annually. However, updated figures now put the cost at around £1 billion per year. Businesses have welcomed these concessions, but the changes have drawn criticism from left-wing Labour MPs and trade unions. In November, Labour scaled back plans to grant all workers day-one protection against unfair dismissal, with enhanced protections applicable after six months instead. The new impact assessment stated that the lower cost reflects "clearer implementation timelines". However, the British Chambers of Commerce said the £1 billion figure "is likely to be a massive underestimate".
  
  The Trades Union Congress welcomed the reforms, stating they’re "good for workers and employers – driving up labour market participation, improving health, raising productivity and boosting demand". However, general secretary, Paul Nowak, called for ministers to "finish the job as soon as possible”.
   
• The UK construction sector ended last year on a weak note. Output shrank for the 12th consecutive month in December 2025, marking the longest uninterrupted decline since the 2008 global financial crisis. The S&P Global/CIPS Purchasing Managers’ Index recorded 40.1 in December, well below the 50 threshold that signals growth. Housebuilding was particularly hard hit, with its subindex falling to 33.5 – the lowest since the covid-19 lockdowns in May 2020. Housing Secretary Steve Reed acknowledged that housebuilding must accelerate to meet Labour’s pledge of 1.5 million homes across England, but developers predict the target will be missed. Output also fell in the commercial sector and civil engineering remained the weakest sector. Despite this, confidence among construction firms rose to its highest level since July, according to a monthly survey, as 37% expect output to increase, driven by infrastructure spending and easing inflation.
  
  Senior UK economist at Pantheon Macroeconomics, Elliott Jordan-Doak, also noted: “Mansion tax will exert further downward pressure on the housing market.” While house prices fell in December 2025, they’re expected to rise by as much as 4% this year, according to Nationwide building society, which also predicted that first-time buyers will drive the housing market in 2026.
   
• Labour MPs have called on Prime Minister Sir Kier Starmer to rethink planned changes to hospitality businesses. In the autumn budget, Chancellor Rachel Reeves confirmed that the business rate relief, introduced during the covid-19 pandemic, will end in April 2026. Hospitality businesses, which previously benefited from discounts of 40% to 75%, will no longer receive these reductions, with the pub industry warning that this could lead to widespread closures.
  
  Labour MP for York Central, Rachael Maskell warned that these changes could force closures and urged the prime minister to “urgently review the business rate proposals”. The government stated that it’s in talks to assess the support it can offer and highlighted that it’s provided some relief by reducing the "multiplier" used to calculate business rates. Labour MPs told the BBC they remain optimistic that further relief will be provided.
   
• Retailer Marks & Spencer posted strong sales of food over the Christmas period. However, clothing, homeware and beauty sales fell as it continues to struggle following last year’s cyber-attack. The store blamed poor sales on “fragile consumer confidence and milder weather”. In November, it revealed that underlying profits had halved to £184.1 million in the six months to 27 September 2025, after it had to stop online orders for more than six weeks due to the attack. It linked poor fashion sales to “the long tail impact on stock data and management following the incident”, in addition to “reduced high street footfall”. Looking forward, the business plans to “accelerate the reshaping strategy”, which involves closing and moving stores that contain clothing and adding more space for food.

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