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The wall of sound shouting “liar” at the chancellor is a bizarre Westminster frenzy. Stand back from the hysteria and ask this question: how can Rachel Reeves be accused of raising more money than necessary when there is still pitifully little to go round in every department at her cabinet table? It’s a weird Tory ramp that she lied about a black hole when we can see it everywhere in the real world. She could have raised more.
As the prime minister, Keir Starmer, pleads the case for all that was Labour-flavoured in the budget, the week also brought a breakthrough for Labour’s flagship employment rights bill. Shamelessly stymied by the Lords’ Tory majority, the government watered down a clause on so-called day-one rights that would have given workers protection from unfair dismissal from the day they walked into a job. That legal right will now kick in at six months – still a lot better than the current two-year wait. Business has been ferocious, urging Tory peers to hold up and reform the bill with an avalanche of hostile amendments. Compromise was necessary.
Betrayal, says the left! “The employment rights bill is a shell of its former self,” Sharon Graham, the general secretary of Unite, said in a harangue against the budget and the bill. Her stream of vituperation pumped up the Daily Telegraph front page with delight: “Labour’s biggest donor turns on Reeves”. She said of the budget: “Stealth tax is a tax on workers pure and simple. Workers have been left unable to trust Labour.” No nod to the 450,000 children rescued from poverty: treachery is hard-wired into the body politic of the left.
The deal on day-one rights was agreed at the last minute by employers and the TUC, with consent from Unison and other major unions to get the bill through before Christmas. Unison’s Christina McAnea explained to her youth conference last week why it was worth conceding this point: “If the bill fell, the government would have to bring in a parliament act to force the legislation through, meaning a year’s delay for key rights.”
The Resolution Foundation, champion of lower-paid people, backed watering down rights to day-one unfair dismissal, warning that it would blight the prospects of millions while offering “little obvious gain to workers”: it would “inhibit hiring” and risk plunging tribunal courts into crisis that would “only benefit employment lawyers”. Though some Labour MPs, such as Rachael Maskell, protested loudly, I doubt there will be more than a handful of rebels. Angela Rayner, the bill’s architect, will not be among them.
What really matters here is speeding up the abolition of anti-union laws. For decades these have tipped the balance in pay and power in favour of employers. Rayner calls it “a once-in-a-generation chance to reshape the world of work”, and she’s right.
The bill restricts zero-hours contracts, with no more last-minute shift cancellations causing wildly fluctuating weekly incomes. Welcome new parental leave and flexible working rights, sick pay from day one of illness, and no more P&O-style debacles. Fair pay agreements, starting in the care industry where Rayner experienced zero-hours working life, will ensure a whole sector pays just wages.
Trade unions for the first time get a vital right to enter workplaces to recruit, allowing reps into every fast-food chain, care home, care agency, pizza delivery company, warehouse and “fulfilment centre”. The Telegraph protests at “Labour plotting to let unions barge into businesses”. But the current situation is grim. A recent TUC presentation described an example where a care home firm that did recognise unions was taken over by a new company that didn’t. This was their written instruction for managers: the company “do not recognise any union” and if a representative turns up, “please be aware that union representatives do not have any right to canvass members and you should politely decline any request to speak to employees”.
No more of that. Expect union membership to rise. The fall in pay over the decades tracks the drop in union membership from 50% in 1979 to 22% now.
Recruitment will still be difficult, where insecure workers with no knowledge of unions can be intimidated by employers, not knowing how to appeal to the central arbitration committee to secure union negotiating rights. Companies know that the employment tribunal backlog for hearing unfair dismissal cases stretches more than a year ahead: people give up. But it will get easier, and balloting staff for union recognition will no longer be tilted in favour of the company.
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The noise from the employers and their media disguises how popular these measures have always been. A huge Focaldata poll for the TUC finds that 72% want zero-hours workers given firm contracts, with similar numbers backing everything else in the bill. With one in eight gig workers so insecure they never know how many hours they will get a week, remember this shocking fact: they were twice as likely to die in the pandemic, clinging on to their jobs in the face of danger.
It’s a curiosity that a large majority of voters backing Nigel Farage also want stronger working rights. Yet he and his MPs voted against every item in the bill. The day may come, closer to the next election, when the scales fall from the eyes of many Reform supporters, discovering they disagree with Farage on just about everything except immigration. This landmark bill may come to be seen as a great cultural change this government leaves as its legacy, giving power to workers to resist bad employers, setting off a seismic move towards fairer rewards.
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Polly Toynbee is a Guardian columnist
