Angela Rayner last night warned Sir Keir Starmer against making further concessions on her flagship workers’ rights bill.
In a pointed intervention, the former deputy prime minister told the Commons it was ‘not the time to blink or buckle’ on legislation boosting the right to strike, which employers warn will cost the economy billions.
The Prime Minister faced a Labour backlash last month when he ditched a manifesto commitment to give workers the right to claim unfair dismissal from their first day in a new job.
Government sources said the climbdown was needed to get the new law through the House of Lords, where it has been bogged down for months.
Ms Rayner last night warned those in the Lords that there was ‘no more time to waste’ as she accused peers of siding with ‘vested interests to resist the manifesto on which we were elected’.
During a debate on the Bill, at a time when she is being touted as a potential successor to Sir Keir as Labour leader, she described the reversal on day one rights as a ‘tough decision’ and urged ministers to make no more concessions.
‘Now is not the time to blink or buckle,’ she said. ‘Let’s not wait a minute more – it’s time to deliver.’
Former Labour frontbencher Andy McDonald savaged the Lords for frustrating a manifesto commitment – and that ministers should not have given way.
Angela Rayner last night warned Sir Keir Starmer against making further concessions on her flagship workers’ rights bill
‘The Lords should not block mandates and ministers should not capitulate,’ he said.
Ms Rayner’s appearance in the Commons came as analysis suggested that her Bill could cost the economy as much as £38billion. Research by the Growth Commission think-tank found that plans to remove the cap on payouts for unfair dismissal claims could double the expected cost of the legislation to businesses.
MPs were last night expected to throw out a string of attempts by peers to water down the Employment Rights Bill, despite its threats to the economy.
In a surprise move last month, ministers agreed to drop a manifesto pledge to give workers the right to claim unfair dismissal from their first day in a new job.
In a compromise they will be able to lodge a claim after six months in post – down from the current two years. But ministers agreed to scrap the £118,223 cap – potentially opening the door to huge claims. The move came following discussions between ministers and Ms Rayner, who championed the Bill in Government.
Employment law firm Lewis Silkin warned the ‘seismic’ change ‘does not sound like a recipe for growth’. The British Chambers of Commerce said the plan would be ‘hugely damaging’.
Even after the Government watered down the day one rights, the Growth Commission forecast the Bill would cost the economy £23billion over five years.
Last night the think-tank warned that removing the cap on unfair dismissal claims could add another £15billion to the cost. Chairman Shanker Singham said: ‘This single piece of legislation continues to severely curtail the Government’s growth ambitions. Ministers would do well to remember that what chills the ability to fire, chills the ability to hire as the UK labour force participation rate continues to drop.’
Tory business spokesman Andrew Griffith urged ministers to think again but warned they seemed determined to ‘snuff out jobs and slow the economy with their red tape’.
He said the latest proposals would be ‘ruinously expensive for small businesses, and in the public sector it will leave the taxpayer on the hook for huge payouts for failure at the expense of our public services’.
Meanwhile, it emerged that employers will be required to hand out what Mr Griffith called ‘pro-union propaganda’ to staff as part of the latest changes to the legislation. The Government will draw up an approved statement to prevent ‘hostile’ employers discouraging membership.
Unions hope the move – and others in the Bill – will help halt a long decline in membership.
