Sir Keir Starmer has been put on notice by Labour’s union backers that he must not water down the workers’ rights bill after Angela Rayner’s resignation.
Union chiefs vowed to fight for the bill following the departure of the deputy prime minister, who championed the legislation despite fears that it would damage the economy, reports The Telegraph.
No 10 is coming under intense pressure to rethink the bill as part of efforts to boost growth, with sources suggesting it is listening to critics from the private sector who are concerned about the impact on business. The news emerges as a report argues Angela Rayner won’t be gone for long – and she’ll be back with a vengeance.
Business chiefs demand changes
UKHospitality, the trade body, will write to all new ministers this week to demand changes, including to rules that will protect workers from “unfair” dismissal from day one, and the automatic right to demand regular hours.
The bill, which returns to the House of Commons for debate on Monday next week, is expected to cost companies £5bn a year through extra red tape and rules that will make it harder to sack poorly performing staff.
However, unions are already unhappy that the bill does not go far enough. With the departure of Ms Rayner, Sir Keir has lost the minister most trusted to sell any compromises to the party’s Left.
The unions are now expected to back someone even more closely aligned with their views in the race for Labour deputy leader.
Unions pledge to fight ‘every single inch’
Paul Nowak, general secretary of the Trade Union Congress, which opened its annual conference on Sunday, said: “At every stage, we’ll be in the room making sure that the bill does what it intended to do: to give workers more rights. We’ll fight for that every single inch of the way.”
Allies of Ms Rayner also made it clear that she would resist any alterations to the bill, pointing to her resignation letter, which said the bill would provide the “biggest uplift in workers’ rights in a generation”.
After being forced to quit following a Telegraph investigation into her tax affairs, she told Sir Keir: “I am and will remain deeply proud of that legacy.”
Businesses on front foot after Rayner’s resignation
Business leaders nonetheless believe they have an opportunity to press for a change of tack.
Kate Nicholls, the UKHospitality chairman, said: “Now is the time to press pause and review these measures, and to take pragmatic steps so the bill is proportionate and balanced and does not cause costs to business and jobs.”
The British Retail Consortium and the Federation of Small Businesses are also urging the Government to accept amendments passed in the Lords earlier this year to water down the bill.
Union concerns about changes to the bill were prompted not only by the resignation of Ms Rayner, but also by the sacking in the subsequent reshuffle of Justin Madders, the minister for employment rights who was a key figure in pushing the legislation through Parliament.
‘Build, baby, build’ mantra
Sir Keir used the reshuffle – which he completed on Sunday night with a handful of changes among the most junior ranks of the Government – to promote pro-growth ministers such as Pat McFadden in welfare and Steve Reed to housing, while Darren Jones, previously Chancellor Rachel Reeves’s deputy, was given a pro-growth job within No 10.
Imogen Walker, the wife of Morgan McSweeney, Sir Keir’s chief of staff, was made a government whip. She became an MP in 2024.
Mr Reed, who took over from Ms Rayner as Housing Secretary on Friday, told civil servants at the weekend that his mantra would be “build, baby, build”.
He will bring together developers and builders this week to discuss the next stage of planning reform.
Sources warn of bill being ‘killed’
Government sources told the Financial Times that workers’ rights legislation was likely to be watered down now that its leading advocate had left the Government. One said some in No 10 were trying to “kill” key parts of the bill by offering concessions to business.
In a post on X, Mr Madders wrote: “Let’s hope these fears are unfounded because it would be really, really foolish for the Government to row back on key manifesto commitments that are popular with the public and will show what a positive difference a Labour government can make.”