Keir Starmer is set to face intense lobbying from both businesses and trade unions over former deputy prime minister Angela Rayner’s flagship Employment Rights Bill, with the package of reforms still passing through parliament.
The prime minister and newly-appointed business secretary Peter Kyle are set to weigh the conflicting interests of businesses and unions, which make up a significant portion of donations to the Labour Party.
Senior government officials are set to address union leaders at the Trade Union Congress in Brighton this week while discussions and motions on the Employment Rights Bill will feature heavily in events.
Christina McAnea, the boss of the UK’s largest trade union, said it would be a “huge mistake” for Labour to water down the bill after a number of ministers taking the lead on reforms were removed during a sweeping government reshuffle on the wekend.
“It doesn’t send out a very good message that the people who were absolutely committed to driving through the employment rights bill are no longer doing those jobs,” she said.
Sharon Graham, the general secretary of Unite, has said the union could disaffiliate from Labour if it pivoted on the bill, with a vote set to be held.
Labour backbenchers are also worried that delays to the bill’s implementation will risk leaving it vulnerable to changes.
Officials in No 10 have begun discussions on watering down the Rayner-led bill after months of lobbying from top business groups, according to a report in the Financial Times, as they fear extra red tape on “fire and rehire” practices and zero-hour contracts could add to costs.
Starmer’s growth ambitions under pressure
Shadow business secretary Andrew Griffith sent a letter to Kyle demanding that he puts the “national interest first” and liste to concerns raised by UKHospitality and the British Retail Consortium.
“Any credible ‘reset’ of this government requires that this Bill be shelved and the government look afresh at measures to promote growth and competitiveness of the UK economy,” Griffith said.
MPs are set to consider changes proposed in the House of Lords to replace a new right against unfair dismissal from the first day of employment and a weakening of zero-hours contracts.
Justin Madders, the former employment minister who was replaced during the reshuffle, said he was disappointed to not see the Bill’s royal assent as a minister, adding that he would push for it to get “over the line as per our manifesto”.
The 200-page bill’s passage through parliament could have ramifications on the Autumn Budget in November.
The Office for Budget Responsibility (OBR) did not take a full view on the bill’s impacts on growth and employment at the Spring Statement in March after economists claimed there was a lack of detail of what was in the bill.
It suggested that the bill will have a “net negative effect” on the UK economy.
The government has argued that the bill is “pro-growth” and “pro-worker” but business surveys have flagged the fears of owners of facing further red tape.
Its own analysis showed that policies could add up to £5bn a year on businesses, with small and medium-sized businesses to suffer more from extra regulation.
