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A new deal for working people

Angela Rayner
By Imogen Shaw
04 April 2024
Public Affairs

Writing in last week’s Sunday Times, former New Labour spin doctor Peter Mandelson has urged his party not to ‘rush’ reforms to employment and trade union law for fear it may upset the business community.

Labour’s new deal for working people, spearheaded by Deputy Leader Angela Rayner and championed by the party’s affiliated trade unions, is one of the party’s most well-developed policy platforms. However, as Mandelson’s very public attempt to influence internal Labour debate on the policies alludes to, some of the measures behind the promise to “make Britain work for working people” are starting to draw the fire of business leaders.

After the significant watering down of Labour’s £28bn green prosperity plan, some party activists and trade unionists are concerned that the party’s workers’ rights platform could be next to be pared back, as Labour gears up to fight a general election campaign.

With Labour’s significant poll lead holding steady and a change in government appearing very probable, business groups are increasingly looking deeper into the detail of Labour’s policy commitments.

The workers’ rights plan, developed closely with Labour’s trade union backers, includes among other measures a ban on zero-hours contracts, the introduction of employment rights from the first day of a job and an end to the much-criticised practice of “hire and fire”.

As when Labour committed to end zero-hours contracts under Ed Miliband’s leadership in 2015, businesses and trade associations have raised concerns that there are some circumstances where a zero-hours contract is preferred by both workers and businesses. Much like in 2015, Labour has now shifted its rhetoric slightly and is promising to stop “exploitative” zero-hours contracts, clarifying that its plan is to ensure anyone working a regular number of hours for 12 weeks or more has the right to a contract that reflects their usual hours of work.

Some business groups such as the CBI have taken their criticisms further, and have publicly  urged Labour to avoid what they have described a “European model” of labour market laws – which, they argue, make firms reluctant to take on workers because it is harder to lay them off.

In the face of this additional scrutiny from certain corners of the business community, and public criticism from one of the architects of the New Labour project, observers would be forgiven for concluding that Labour’s new deal for working people is destined to go the way of the £28bn pledge.

However, this is unlikely for several reasons. Firstly, Labour’s agenda for workers has huge support from its trade union affiliates, who would fight fiercely against any significant backpedalling on its core policies. This was not necessarily the case for all of Labour’s green agenda, with the GMB in particular remaining unconvinced that Labour’s plan was good enough to convince Scottish oil and gas sector workers that a vote for Labour would not be a vote to lose their job.

Secondly, thew new deal for working people is seen as an important retail offer to working-class voters, offering something far more tangible than Starmer’s five overarching ‘missions’. Several of the new deal policies have featured prominently in Labour’s string of successful by-election campaigns, providing Rayner and her supporters with ballast for their case that these policies are election winners.

The third reason is that Labour is more confident than ever in the strength of its relationships with the business community. Speaking at Labour’s recent business conference, Sir Keir Starmer said: “We are going to level up workers’ rights in a way that has not been attempted for decades. And that might not please everyone in the room or the wider business community. But nobody can doubt that our labour market is at the heart of our challenges on productivity.” The fact that the party feels able to put this message across is both a testament to its confidence in the relationships it has built with business, and to its conviction that the Conservatives currently do not have a compelling story to tell Britain’s businesses.