Sir Keir Starmer is once more at war with the left after he ditched a key part of Angela Rayner’s workers’ rights bonanza.
Just a day after the Prime Minister and Rachel Reeves caved into Labour backbenchers’ demands by lifting the two-child benefit cap, he reignited their fury by scrapping long-standing plans to allow employees to claim unfair dismissal from day one in new jobs.
Yet ministers denied claims by angry MPs that the latest U-turn constituted another breach of the party’s manifesto while Downing Street dodged allegations it had lied about the secret talks with unions and business chiefs that led to the climbdown.
As the PM faced demands from trade unions to reinstate to the watered-down proposal, the Tories urged him to hold firm – and go further by scrapping the entire Employment Rights Bill.
Shadow Business Secretary Andrew Griffith told the Daily Mail: ‘Only last Monday Starmer said he was fully in favour of saddling businesses with ruinous day one legal burdens. It’s good that he’s changed his mind but who can tell whether it lasts.
‘And with its back to the 1970s blank cheque to the unions, he really ought to have the spine to scrap the whole thing.’
Last year Labour’s election manifesto vowed a Government led by Sir Keir would introduce legislation in its first 100 days to ‘make work pay’ including ‘introducing basic rights from day one to parental leave, sick pay, and protection from unfair dismissal’.
Yet the bill, which the Government’s own impact assessment admits will cost businesses £5billion a year, has not yet become law after the House of Lords – where Labour does not have a majority – repeatedly voted down key elements.
On Thursday evening, the Government dramatically announced it was giving in and would replace day one protection from unfair dismissal with a reduction in the qualifying period from the current two years to six months, as peers had suggested.
Former employment minister Justin Madders, a close ally of Ms Rayner, said: ‘It might be a compromise. It might even be necessary to get the Bill passed (as soon as possible). But it most definitely is a manifesto breach.’
Veteran Labour MP Diane Abbott said: ‘This is a breach of our manifesto commitments.’
Former Shadow Employment Minister Andy McDonald said: ‘We went into the election with that manifesto promise to bring about day one rights, including the right not to be unfairly dismissed.’
And General Secretary of the TSSA union Maryam Eslamdoust said: ‘This is a very significant watering down of the Employment Rights Bill and a breach of Labour’s manifesto commitment – one we do not support. It’s vital that the government thinks again about this damaging U-turn.’
Yet Education Secretary Bridget Phillipson denied Labour was breaking another manifesto pledge – just days after the Chancellor was accused of doing so by freezing income tax thresholds again.
She told Sky News on Friday: ‘In the manifesto, what we said was that we would work with trade unions, with businesses, with civil society, in consulting on those protections that we’d be bringing forward.
‘So, there are both parts to that, within the manifesto, the important rights and the consultation.’
On Monday, the Prime Minister’s spokesman had told reporters: ‘The Employment Rights Bill is good for workers, it’s good for businesses and it’s good for the economy, and we will overturn all attempts to scupper these plans including watering down day one protection from unfair dismissal.’
However at the same time, ministers had been meeting unions and business groups behind closed doors to thrash out the compromise that was agreed on Thursday.
Asked if it would have been more honest to tell journalists the talks were taking place, a No 10 spokesman said on Friday: ‘It was our position as of then and going into those talks that we wanted to deliver those reforms as swiftly as possible and in full.’
Sources said negotiations were still live and no agreement had been reached at the time of Monday’s statement to reporters.
