Create Worker Protection Enforcement Authority

Policy baseline

The manifesto proposes a new Worker Protection Enforcement Authority. Direct fiscal costs are staff, investigations and legal enforcement.

• Targets underpaid or insecure workers.
• Compliant firms may gain from level enforcement.
• Non-compliant firms face higher costs.

Core trade-offs

The direct beneficiaries are workers currently under-enforced. The costs fall mainly on employers breaking rules and taxpayers. The main economic question is enforcement can raise compliance costs.

• Workers currently under-enforced gain most directly.
• Costs fall mainly on employers breaking rules and taxpayers.
• Key risk: enforcement can raise compliance costs.

Fiscal impact by 2028-29

+GBP 0.1bn to +GBP 0.8bn. Central estimate: +GBP 0.2bn.

• Positive numbers mean net fiscal cost; negative numbers mean Exchequer savings.
• Main channel is the scored tax, spending or delivery change.
• Offsets depend on tax receipts, behaviour and pass-through.
• Range reflects uncertain implementation and economic response.
• This is not an official costing.

Economic impact by 2028-29

• Jobs: Higher expected labour costs can reduce marginal hiring and contracting.
• Wages: Protected workers gain security or pay; some costs shift through lower hours or prices.
• Prices: Labour-intensive sectors may pass costs to consumers.
• GDP / productivity: Likely mildly negative if rules reduce flexibility; benefits depend on enforcement and productivity.

Assessment

This is a real trade-off, not a free gain. Workers currently under-enforced benefit, while employers breaking rules and taxpayers bear most costs. Overall output depends on behaviour, capacity and pass-through.

Confidence: Medium-low. Higher on the policy target and fiscal channel; lower on behaviour, pass-through and economy-wide effects.

Main risks

• Hiring risk: Employers may reduce marginal hiring, hours or outsourcing flexibility.
• Tribunal pressure: Rights without enforcement capacity create delay and uncertainty.
• Small-firm burden: Compliance costs are heavier for small employers.

Safeguards

• Phase rights with tribunal capacity.
• Offer small-firm compliance guidance.
• Monitor hiring, hours and contracting.

Academic evidence

UK government evidence

Sources

• PolicyLens illustrative scenario methodology for create worker protection enforcement authority Internal - PolicyLens, 2026
• The Costs of Wrongful-Discharge Laws Academic article - Autor, Donohue and Schwab, Review of Economic Studies, 2006
• Unemployment, Institutions, and Reform Complementarities Academic article - Bassanini and Duval, Economic Journal, 2009
• Employment Rights Act economic analysis UK government analysis - Department for Business and Trade, 2025
• For a Fair Deal: Liberal Democrat Manifesto 2024 Party policy source - Liberal Democrats, 2024

Other Liberal Democrats policies

• Introduce free personal care
• Raise Carer’s Allowance by GBP 20
• Create a Carer’s Minimum Wage
• Scrap two-child and benefit caps
• Recruit 8,000 more GPs
• Guarantee urgent NHS dentist access
• Put counsellors in schools
• Extend free school meals