Luke Johnson, the prominent co-owner of the controversial Gail's bakery chain, has delivered a blistering critique of the Labour government's approach to business, declaring that the 'mood among employers is the darkest ever seen.' In a stark warning, the 64-year-old entrepreneur accused Sir Keir Starmer's administration of making it 'more expensive and more risky to employ people,' while lambasting the Cabinet for its lack of commercial experience.
A Scathing Assessment of Government-Business Relations
Speaking to the BBC, Mr Johnson, who holds a 15 per cent stake in Gail's and has roles in businesses like Patisserie Valerie and The Ivy, asserted that companies are grappling with increased red tape and wage hikes under Labour. He emphasised a profound disconnect, stating, 'No one in this Cabinet has ever been in a business, none of them have ever created any jobs, and I'm afraid to say there is a bigger disconnect between this Government and the business people I know than any government I've ever come across.'
Drawing on four decades of experience in growing businesses and generating employment, Johnson added, 'I’ve spent 40 years growing businesses and creating jobs, and the mood amongst employers and those who invest in this country is the darkest I’ve ever seen.' This sentiment reflects broader concerns within the business community about the current policy environment.
The Gail's Phenomenon and Its Controversial Expansion
Mr Johnson has been a key financial backer of Gail's for over a decade, supporting the High Street chain known for its premium-priced baked goods and coffee. The bakery, which charges £4.40 for an iced latte, £4.70 for a chocolate bun, and £4.90 for a single serving of carrot cake, has rapidly expanded across middle-class London suburbs in recent years, becoming synonymous with gentrification in leafy areas of the capital.
Last December, the company announced ambitious plans to open 40 new stores across England by February 2026. However, this expansion has not been without controversy. For instance, in November, plans to open a Gail's in Crystal Palace left local businesses 'trembling with fear,' as they worried the chain would 'brain-wash' customers away from independent shops under the influence of a corporate giant.
Policy Impacts and Youth Unemployment Concerns
Johnson's comments coincide with significant economic challenges. Chancellor Rachel Reeves' hike on Employer National Insurance has been viewed by many as an attack on businesses, raising fears that young people could be 'priced out' of the job market. Recent figures from the Office for National Statistics (ONS) show youth unemployment rates at an 11-year high, with almost one in six people aged 18 to 24 currently out of work.
Earlier this week, The Times reported that the Government is reviewing a manifesto pledge to increase the minimum wage for young people to align it with older workers by 2029. Minimum pay for those aged 21 to 22 has surged by 33 per cent over the past two years, and in April, young workers are set to receive another 8.5 per cent increase. Employers warn that these moves are diminishing incentives to hire younger, less experienced workers over older applicants, potentially exacerbating the unemployment crisis.
This combination of policy measures and economic data underscores the tensions highlighted by Johnson, painting a picture of a business landscape under strain and a government facing criticism for its perceived lack of practical commercial insight.
