Sir Martin Sorrell: Labour’s working week reforms won’t help firms

British businessman Sir Martin Sorrell has said that altering the working week will not boost productivity in the UK, pushing back on Prime Minister Keir Starmer’s pledges to transform Britain’s work culture.

Starmer has vowed to “level up workers’ rights” in the UK, proposing a default right to flexible working that, he argues, will make employees more productive and loyal. 

However, Sorrell, founder of advertising giant WPP and now chairman of S4 Capital, told City A.M.: “What we need is stability and a business environment that fosters investment and drives productivity. Experiments with the working week or working hours don’t help,” he said.

His comments come as business secretary after Jonathan Reynolds told The Times that giving employees the right to work from home and disconnect from work emails or calls in the evening could make them more “motivated and resilient”. He added that are “real economic benefits” to more flexible working.

The government is currently drafting a series of reforms aimed at overhauling workers’ rights, with an employment rights bill set to be introduced next month.

The bill is expected to include a ban on exploitative zero-hours contracts and introduce day-one protections for workers, in what Starmer has billed as the biggest reform to workers’ rights in a generation.

Business groups such as the CBI have raised concerns over these proposals, with some warning that the measures could harm economic growth.

Sorrell echoed these concerns, calling instead for “investment tax credits or accelerated depreciation – tangible measures that encourage businesses to invest and grow.”

He also pushed back against other looming changes such as a potential increase to capital gains tax, which Chancellor Rachel Reeves may introduce to plug a gaping £22bn “black hole” in the public finances.

“Increasing capital gains tax, especially without index-linking or time apportionment, will drive entrepreneurs and business owners out of the UK,” Sorrell warned.

“In a digital world, talent is mobile, and many countries are offering far more attractive tax incentives,” he added. “Changes to property and inheritance taxes would only exacerbate the problem, making the UK less competitive on a global scale.”

Goldman Sachs has predicted that the Chancellor will need to raise taxes by at least £15bn to £20bn in October’s Budget, with pension reliefs also likely to come under review.