On Wednesday, the Government published its analysis of the zero hours measures in the Employment Rights Act 2025. The direct cost to employers, it estimates, will fall somewhere between £350 million and £2.9 billion a year, with an indicative central figure of £1.1 billion. Back in January, the Government’s analysis of the entire Act put the direct cost to business at around £1 billion a year. Just the zero hours measures are now expected to cost businesses more than the whole Act was supposed to.
Most entrepreneurs don’t use zero hours contracts. It is worth their attention anyway, because the uncertainty on display here is the same uncertainty they are hiring under.
Entrepreneurs are no doubt too busy building their businesses to pay it much heed, so as a reminder, the Act received Royal Assent in December with most of its substance deferred. Its provisions arrive in instalments — some immediately, then February, April, August and October of this year, then across 2027, with the detail emerging from a run of consultations still under way.
On 1 January 2027, the qualifying period for an ordinary unfair dismissal claim falls from two years to six months and the statutory caps on unfair dismissal compensation disappear entirely. The six-month rule applies to anyone who already has six months’ service on that date, which means anyone hired from around the end of June this year is included. Offers being made this month are offers into a regime that is not yet in force and whose surrounding detail is still being drafted.
There is a debate to be had about what these protections are worth to employees. There is no debate about this: they are not a free lunch.
When the Bill was announced, some argued it would cost the economy little and might even lift productivity. The Government still makes a version of that case, and its own new analysis shows how hard a case it is to make: the measures will raise administrative costs, reduce flexibility and make it harder for employers to respond to swings in demand. The analysis identifies 16- to 24-year-olds among the groups most affected, while arguing they also stand to gain most.
Which brings me back to something I wrote here in February, drawing on Pieter Garicano’s Why Europe doesn’t have a Tesla, which made the case that Europe’s labour laws go a long way to explaining its innovation gap with the US. Where dismissal is expensive, firms stop creating the jobs they might later have to discontinue, and the jobs most likely to be discontinued are the experimental ones.
A German restructuring runs to 31 months of salary per worker against seven in the US. The Danes, by contrast, let employers dismiss almost at will and catch workers with unemployment insurance covering up to 90% of prior income; the Austrians use portable severance accounts, funded by employers, that follow the worker between jobs. Both pair flexibility with a safety net, and both are among Europe’s more innovative economies.
Britain doesn’t have to choose between a safety net and a dynamic economy, I wrote then, but right now we’re getting the worst of both worlds. Six months on, with the expected costs rising, that looks truer than it did.
Sir Richard Branson responded in City AM to my column on entrepreneurship, making the point that what matters is championing “anyone willing to have a go at starting a business”.
Meanwhile, our Patron Emma Jones CBE, the Small Business Commissioner, also made the top ten when we asked founders in Cool Britannia which entrepreneur best champions the UK, and says she is “chuffed and humbled to be ranked alongside such cool Britons”.
As you’ll know, we’re big fans of using the honours system to raise the status of entrepreneurship. To that end, if you work with entrepreneurs, or with those supporting them, who you think should be honoured, drop me an email as I can pass on some information from the BIST Honours Team.
Have you bought or built an AI system and later found a simpler or cheaper way to achieve the same result? For a project on AI adoption, our friends at the Royal Academy of Engineering are looking for short examples of businesses that changed their requirements, supplier, model, hosting arrangements or build-versus-buy decision to reduce cost or complexity. They would also like to hear from businesses that avoided these problems by comparing their options carefully at the outset. Examples from organisations of any size are welcome and can be anonymised. Please contact Anastasia Bektimirova (formerly of this parish) by Friday 21 August.
We’re delighted to welcome Helen Stenhouse, Co-Managing Director and Co-Owner of People Puzzles, as an Adviser to The Entrepreneurs Network. Since 2010, People Puzzles has embedded board-level People Directors part-time into more than 1,000 growing businesses. On why she backs Britain: “The UK has an extraordinary depth of entrepreneurial ambition: people who are willing to back themselves and build something from nothing.” And on why she backs us: “Entrepreneurs need people in their corner, not just cheering them on but actually getting into the room with the people who make the rules.”
Find out more about becoming an Adviser here.
APPG for Entrepreneurship: Evidence Session on NEETs
🗓 Wednesday, 26 August 2026
🕐 14:00 to 15:00
📍 Online
ℹ️ An evidence session for the All-Party Parliamentary Group (APPG) for Entrepreneurship, on how founders and the third sector can support those “Not in Education, Employment or Training” (NEETs) into work and what is needed from the Government
⏩ Request a place
No Agenda Breakfast: Talking Tables
🗓 Thursday, 27 August 2026
🕐 08:45 to 10:00
📍 Stockwell, London
ℹ️ Join us for coffee, pastries and honest conversation with a dozen entrepreneurs — no agenda, no pitches and no panels
⏩ Request a place
APPG Evidence Session: Entrepreneurship in Financially Excluded Communities
🗓 Wednesday, 2 September 2026
🕐 17:00 to 18:00
📍 Online
ℹ️ An evidence session for the All-Party Parliamentary Group (APPG) for Entrepreneurship, on how the UK can better support entrepreneurs from financially excluded communities — chaired by Lord Kamall
⏩ Request a place
No Agenda Breakfast: Evelyn Partners
🗓 Wednesday, 9 September 2026
🕐 08:45 to 10:00
📍 The City, London
ℹ️ Join us for coffee, pastries and honest conversation with a dozen entrepreneurs — no agenda, no pitches and no panels
⏩ Request a place
Quarterly Adviser Roundtable: UCL School of Management
🗓 Tuesday, 15 September 2026
🕐 10:00 to 11:30
📍 Canary Wharf, London
ℹ️ Our quarterly roundtable for Advisers and Patrons of The Entrepreneurs Network
⏩ Request a place
Job Creators 2026 Report Launch
🗓 Wednesday, 16 September 2026
🕐 15:30 to 17:30
📍 The City, London
ℹ️ Join us at Penningtons Manches Cooper to celebrate the contribution of Britain’s foreign-born founders
⏩ Request a place
We published the latest edition of Three Big Ideas
Andy Burnham vowed to go “further” on business rates to support high street businesses
The Government is looking at regulating the use of AI in gene synthesis to prevent terrorists from making bioweapons (Paywall — Bloomberg)
AI may be behind the resilience of the UK economy in the second quarter of 2026
Callum Coleman and Ed Lawrence argued that the AI Taskforce should bet on verification technology to prepare for a future AI slowdown agreement between the US and China
Guy Ward Jackson argued that Andy Burnham must reconcile his devolution agenda with the need to back “national winner” tech firms
The Society for Technological Advancement published its latest series of letters on the UK’s sovereign capability across the AI stack
Increases to auto-enrolment have contributed to a 70% rise in policy-driven costs for SMEs, according to the British Chambers of Commerce (Paywall — Professional Pensions)
Dell research found that SMEs with high adoption rates of AI save six or more hours per employee each week
Our Supporters, Advisers and Strategic Partners are essential to helping us understand what entrepreneurs need to flourish, and are closely connected with our work. If you already support us — thank you. If you don’t, please consider helping us make the UK the best place in the world to start and grow a business.
State of Asian Funding UK Report Survey
🗓 Friday, 21 August 2026
ℹ️ The second annual report by Bae HQ into the funding landscape and attitudes among founders of Asian heritage in the UK, to be released in Parliament
⏩ Find out more
The UK ScaleUp Funding Forum
🗓 Tuesday, 22 September 2026
🕐 14:00 to 19:00
📍 London
ℹ️ VenturePath invites you to the UK ScaleUp Funding Forum on 22 September — a half-day with funding providers and exited entrepreneurs, focused on finding the funding route that fits your business.
⏩ Find out more
We’re often asked where founders should turn for practical support beyond policy. So we’ve curated a list of government sites and trusted organisations we regularly recommend. Each week, we share a section from our Support for UK Entrepreneurs page. Are we missing something? Let us know.
Mental Health at Work (Mind) provides free tools to support mental wellbeing in small workplaces.
Able Futures provides free, government-funded mental health support for self-employed people and employees.
Business in the Community provides wellbeing frameworks and guidance to support sustainable organisations.
Ness Labs provides evidence-based articles, courses, and tools for mindful productivity and mental wellbeing in the workplace.
Best wishes,
Philip
Philip Salter
Founder
The Entrepreneurs Network
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