Sign up to receive updates from the Labour Party UK and stay informed on their latest news and developments. We will send you a myFT Daily Digest email every morning summarizing the updates. Labour is making adjustments to its plans to enhance workers’ rights as Sir Keir Starmer aims to appeal to business leaders and refute Tory accusations that his party is “anti-business” before the next general election. According to insiders and documents seen by the Financial Times, a commitment to strengthen gig economy workers’ protections was diluted at Labour’s national policy forum in Nottingham last month. The party also clarified its stance on probationary periods for new employees, confirming that a future Labour government would allow companies to dismiss staff during trial periods.
These moves come as both parties vie for the support of business leaders ahead of an anticipated general election next year. Conservative ministers seek to highlight what they perceive as a contradiction between Labour’s policies and Starmer’s attempts to court corporate chiefs, which insiders have dubbed a “smoked salmon and scrambled egg” offensive. The text agreed upon last month will be published in the lead-up to Labour’s annual conference in October and will serve as a menu for selecting the party’s manifesto pledges.
Excerpts viewed by the Financial Times reveal that Labour has watered down its 2021 pledge to establish a single “worker” status for nearly all categories except for the truly self-employed, regardless of sector, salary, or contract type. The policy aimed to ensure “basic rights and protections” for gig economy workers. Instead of implementing the policy right away, Labour has agreed to consult on the proposal while in government, exploring how a “simpler framework” that distinguishes between workers and the genuinely self-employed can properly encompass the full range of employment relationships in the UK while still allowing workers the option of flexible work.
Labour also clarified that their previously announced plans to grant “basic individual rights from day one for all workers,” including sick pay, parental leave, and protection against unfair dismissal, will not impede the existence of probationary periods with fair and transparent rules and processes. The party also affirmed that businesses will retain the right to fairly dismiss workers based on capability, conduct, or redundancy under a Labour administration.
Labour may encounter further clashes with trade union officials over its policy programme. Unite, the UK’s largest union and a major financial supporter of Labour, disapproved of the document agreed upon in Nottingham and refused to support the party’s stance on workers’ rights and access to unions. Momentum, a left-wing campaign group within Labour, accused the party leadership of appeasing “corporate interests” and criticized the watering down of the commitment to a single tier of worker status.
A Labour party official stated, “Labour is listening to business and unions to ensure we have credible plans for the economy.” Party leader Sir Keir Starmer, shadow chancellor Rachel Reeves, and shadow business secretary Jonathan Reynolds have spearheaded efforts to win over the support of business leaders. A corporate lobbyist noted a conspicuous shift in Labour’s commitment to engaging with business, contrasting it with the party’s previously radical left-wing under Jeremy Corbyn.
Conservative ministers and MPs are concerned that Labour is implementing detrimental policies under the pretense of friendly rhetoric. A government official argued that business leaders have not yet fully grasped Labour’s intentions regarding employment and union rights, but once they do, they will be displeased. The Conservative Campaign Headquarters has compiled a list of the 20 Labour policy proposals deemed most “anti-business” to draw attention to them in the coming months. These include the proposals that Labour modified last month, as well as other worker protections such as expanded rights to flexible working and the introduction of a “right to switch off” from emails and calls outside of working hours. Business secretary Kemi Badenoch is expected to challenge Labour’s employment plans.
One Conservative official described Labour’s plans as “a Trades Union Congress wish list” that would reduce labor market flexibility and increase costs for both the public and private sectors while directly benefiting unions by removing operational constraints. Former Tory business secretary Sir Jacob Rees-Mogg said, “These proposals will make employers, especially small ones, reluctant to hire employees.” Business secretary Kemi Badenoch is poised to address Labour’s employment plans in the coming weeks. A government insider indicated that Badenoch would explore themes such as “securonomics,” suggesting that Labour’s plans involve significant market intervention and government interference in business operations.
In response to the Tory attacks, a Labour official dismissed them as a “desperate” tactic from the same Conservative party that previously expressed disregard for business concerns. Labour maintains that it has a “serious, credible, and ambitious policy programme” aimed at building a strong economy, ensuring workers’ rights, and making work more rewarding.
Various companies and business groups have remarked that Labour’s engagement with them seems genuine and sincere, and businesses are expected to flock to Labour’s annual conference. However, it is unclear how Labour will act on the information it is receiving from businesses or how substantial the engagement process will ultimately be, according to an insider at a FTSE 100 financial services company. Many business executives report limited follow-up from Labour officials after their meetings, and besides workers’ rights, Labour has provided few indications of its priorities, according to some business figures.
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