The Deputy Prime Minister’s “landmark” workers’ rights bill could be watered down over concerns that it will hinder growth – despite Angela Rayner insisting it was “pro business”. The proposed Employment Rights Bill includes a crackdown on zero-hour contracts without the offer of work – something ministers could push back against amid concerns about harming the UK economy.
Business Secretary Jonathan Reynolds said he was considering an exemption to the zero-hour contract ban for some seasonal workers in a private letter to the Confederation of British Industry (CBI), The Telegraph reported. Some seasonal employees could be recruited to “alternative [forms] of contract”, falling “outside the scope of the right to guaranteed hours”, he wrote. Mr Reynolds also allegedly told the fiscal watchdog that other policies in the package – including restrictions on mass redundancies and “fire and rehire” processes – could be watered down further down the line.
Jonathan Reynolds reportedly told the CBI that key measures in the bill could be watered down (Image: Getty)
It comes after CBI chairman Rupert Soames said the combination of the workers’ rights bill and Labour’s tax changes had left bosses “pretty p****d off”.
“People bought into the idea that Labour would be the most pro-business Government ever and clearly they aren’t,” he told the Business Leader Summit in Westminster this week.
The Employment Rights Bill was backed by MPs earlier this month and will be scrutinised by the House of Lords on Thursday.
Ms Rayner has described it as a “transformative package” of reforms and a “once-in-a-generation chance to reshape the world of work … and to deliver growth and build an economy that works for everyone”.
However, the Office for Budget Responsibility also sounded the alarm over negative impacts of the proposed law in a report on the UK economy published ahead of Chancellor Rachel Reeves’s spring statement, on March 26.
The fiscal forecaster warned that new employment regulations which impact “the flexibility of businesses … or the quantity and quality of work” could have “material and probably net negative economic impacts on employment, prices and productivity”.
Mr Reynolds’ letter to the CBI also suggests a rift between Ms Rayner’s department and other cabinet ministers – with shadow business secretary Andrew Griffith suggesting that the Housing Secretary was “in the driving seat” while her colleagues “lay low”.
“It’s always awkward being at odds with your boss,” Mr Griffith said in the Commons. “He says ‘growth’, you say ‘slow’. He wants fewer regulators, you create new ones.”
A government spokesperson said: “We are not considering a carve-out for seasonal workers – there are several ways that an employer could approach seasonal demand while upholding the new rights, such as using fixed-term contracts or guaranteed hours in various ways.
“Our Plan to Make Work Pay is a crucial part of our mission to go further and faster on delivering economic growth, and we have always been clear we would work closely with business to get the details right.”
