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Sir Keir Starmer’s Labor party will unveil a weakened package of workers’ rights in the coming weeks as part of its latest watering down of radical policies ahead of the upcoming general election, the Financial Times has learned.
Labor has vowed to include in its manifesto a long list of employment measures, from higher sick pay to employers scrapping “fire and rehire” and repeal of anti-strike legislation as part of its “New Deal for Working People” is enough.
The package, first unveiled in 2021, was described by Starmer as the biggest expansion of workers’ rights in decades. The Labor leader warned business leaders in February that “not everyone in the room would like it”.
But behind the scenes, shadow ministers were discussing how some of the pledges could be watered down to allay employers’ concerns as the party seeks to bolster its pro-business credibility, people familiar with the matter say.
Those discussions, as well as a phase of targeted outreach to business about the guidelines, have now been completed and the sophisticated package of measures is expected to be published in the coming weeks, the people said.
The move is likely to anger some union leaders but also please business groups who have been more vocal about their concerns since Starmer’s speech in February.
“The overall tone of everything they said on workers’ rights was constructive compared to a few months ago,” one lobbyist said.
A business leader said that after several meetings with the party they were now “fairly relaxed” about its plans.
Labor says shadow ministers will hold a meeting with union general secretaries in the coming weeks to seek their approval of the new version of the workers’ rights package, or at least minimize their opposition.
The renewed New Deal will emphasize that many of the policies are subject to formal consultation with business, which could lead to a dilution of implementation promises and significant delays.
Labor had originally said it would bring forward legislation to implement the reforms within its first 100 days in office. Some of this could take the form of “draft legislation” that will be subject to consultation before the formal process of becoming law begins, Labor officials said. Further measures could be introduced later through secondary legislation.
A Labor official said: “While we want to hit the ground running, some policies will take time to implement and implement.”
At a meeting with business groups last week, Labor deputy leader Angela Rayner and deputy business minister Jonathan Reynolds said there would be consultation on many employment policies.
According to one participant, Reynolds and Rayner told companies they wanted to “raise minimum employment standards and eliminate unscrupulous employment practices” rather than eliminate flexibility.
Shadow ministers said there would be an opportunity to raise concerns about the viability of the plans, the participant added.
Rayner, who led the New Deal, hit out at former Labor cabinet minister Lord Peter Mandelson in March after he criticized the pledges. She compared his complaints to the business “clamor” over the introduction of the minimum wage a generation ago. The deputy leader could now face a backlash from union leaders.
“It won’t be an easy sell for Angela, but…” . . This is still a comprehensive package of reforms that will improve the lives of workers,” a second Labor official said.
“There is a clarification underway,” said a third person close to the process. “There will be significantly more consultations than before.”
A Labor spokesman said the New Deal would remain a “core part of Labor’s offer to the country” in the general election expected this year.
“Our commitments to bring legislation to Parliament within 100 days to implement the New Deal and to conduct full consultations on implementation have not changed,” they said.
People familiar with the updated version of Labor’s program said it will include a commitment to consult on its plan to create a “single status” for all workers except those who are truly self-employed.
They added that there would also be a review of parental leave within the first year of a Labor government.
The original New Deal called for “fair wage agreements” in all sectors, which provided for collective bargaining in each individual industrial sector. This will become a promise to only discuss a fair wage agreement in the social sector.
Plans to give workers a “right to switch off” will not be enshrined in law but will be set out in a code of practice overseen by government employment arbitration body Acas, with the smallest companies exempt.
Although Labor continues to promise to give workers basic job protections from day one of employment, under the revised plans companies would be able to use probationary periods and employees could still be dismissed for “fair reasons”.
Labor will also make clear that the promised ban on zero-hours contracts is a right to a contract that reflects a worker’s regular working pattern over the previous 12 weeks, the people said.
The New Deal is the latest Labor policy package to be rolled back after the party cut its previous commitment to borrow £28 billion a year for green investment in February.