By JASON GROVES, POLITICAL EDITOR

Published: 02:00 GMT, 12 January 2026 | Updated: 03:39 GMT, 12 January 2026

A Labour 'banter ban' could cost businesses more than £60million to enforce, the Government has admitted.

An official impact assessment slipped out this week reveals that pubs, shops and other businesses will face significant burdens in dealing with new regulations that make them liable for offensive comments and behaviour by their customers.

The study, produced by the Cabinet Office, suggests that the total cost could hit more than £60million.

But critics last night warned the true figure is likely to be far higher as officials have made a number of optimistic assumptions about the likely impact.

Shadow business secretary Andrew Griffith said: '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.'

Toby Young, general secretary of the Free Speech Union, said the clampdown on banter would be 'the final nail in the coffin' for many pubs, adding: 'Of course, this Government doesn't give a four X about pubs because Labour ministers never set foot in them.'

The Conservative peer, who led opposition to the plans in the Lords, said the official impact assessment was a 'massive under-estimate' of the likely cost of the ban.

A Labour 'banter ban' could cost businesses more than £60million to enforce, the Government has admitted 

Under the new system, businesses such as pubs will be made liable for 'harassment' of their staff by third parties such as customers. 

He added: 'It assumes it will only take half an hour for publicans to get their heads around the new law, which is laughable when none of the government ministers I challenged about this law had grasped its implications when it was going through parliament.

'This is about forcing employers, on pain of being taken to the Employment Tribunal, to protect over-sensitive workers from overhearing hurty words uttered by members of the public - a ludicrous bit of red tape that no publican can hope to comply with.'

The new regulations are part of Labour's Employment Rights Act, which the Government estimates will cost firms up to £5 billion a year in total.

Under the new system, businesses will be made liable for 'harassment' of their staff by third parties such as customers.

Staff will be able to take their boss to an employment tribunal if they feel they have been 'harassed' due to a so-called 'protected characteristic', such as race, sexuality or disability. Employers are already expected to deal with sexual harassment by customers.

The 40-page government impact assessment finds that preparing to deal with the new legislation is likely to cost business £22.7million, with ongoing costs of £124,000 a year for ten years.

However, it says the total cost could reach £59million over the same period.

Shadow business secretary Andrew Griffith has claimed Labour's new 'banter ban' risks opening 'a Pandora's box of ill-defined duties on employers'

But these costs assume that firms will only need to spend a total of just half an hour familiarising themselves with the legislation and preparing to deal with it.

The assessment also assumes that the new law will lead to just 18 additional employment tribunals each year.

And it claims the changes are 'not expected to have a disproportionate effect' on small and medium-sized firms, despite the fact that most do not have dedicated human resources teams to deal with changes in employment law.

A previous Labour attempt to police the language and behaviour of customers included a 'three strikes rule' giving employers the chance to nip problems in the bud before facing a potential tribunal.

But the Government rejected the idea, with the assessment saying it 'would mean numerous incidents of third-party harassment would still not be in scope to be taken to an employment tribunal because there needs to be two occasions of known harassment to have occurred before employer liability is triggered'.

The Government assessment claims that the overall impact of the change will be 'positive' for the public, due to 'improved welfare and emotional wellbeing'. 

However, it is unable to quantify potential benefits, saying that 'the effect on these wider welfare issues are complex and difficult to measure or monetise'.