The Government has conceded that enforcing Labour's new rules on workplace harassment, dubbed a 'banter ban', could impose a total cost of more than £60 million on UK businesses. An official impact assessment, quietly published this week, warns that pubs, shops, and other venues will face significant burdens under regulations that make them responsible for offensive comments and behaviour by customers.
Mounting Costs and 'Optimistic' Assumptions
The study, produced by the Cabinet Office, estimates that the initial cost of preparing for the new legislation will hit £22.7 million, with ongoing annual costs of £124,000 for ten years. It suggests the total decade-long cost could reach £59 million. However, critics have immediately warned that this official figure is a substantial underestimate, based on a series of what they call overly optimistic assumptions.
Shadow business secretary Andrew Griffith stated: 'Labour's new banter ban opens a Pandora's box of ill-defined duties on employers. There is zero clarity in law of all the things a pub or venue will have to do, yet the government thinks it'll only have minimal cost or impact. They don't have any idea about business.'
A 'Final Nail' for Pubs and Flawed Estimates
The regulations form part of Labour's Employment Rights Act, which the Government estimates could cost firms up to £5 billion a year overall. Under the new system, businesses will be held liable for 'harassment' of their staff by third parties like customers. Staff will gain the right to take employers to an employment tribunal if they feel harassed due to a protected characteristic such as race, sexuality, or disability.
Toby Young, general secretary of the Free Speech Union, argued the clampdown would be 'the final nail in the coffin' for many pubs. He added: 'Of course, this Government doesn't give a four X about pubs because Labour ministers never set foot in them.' He and other peers who opposed the plans in the Lords branded the impact assessment a 'massive under-estimate'.
The assessment's figures assume businesses will need just half an hour to understand and prepare for the new law—a notion critics find laughable. It also projects only 18 additional employment tribunals each year and claims no disproportionate effect on small and medium-sized firms, despite most lacking dedicated HR teams.
Rejected Safeguards and Unquantified Benefits
A previous proposal for a 'three strikes rule', giving employers a chance to address issues before tribunal liability, was rejected by the Government. The assessment argued it would leave numerous harassment incidents outside the scope of tribunal claims.
While the Government claims the overall impact will be positive due to 'improved welfare and emotional wellbeing', it admits these potential benefits are 'complex and difficult to measure or monetise'. For business owners, particularly in the hospitality sector, the immediate concern remains the tangible cost and operational headache of policing customer 'banter', with fears the true financial impact will far exceed the official £60 million price tag.
