Key Takeaways:
- Labour Together, a think tank behind Sir Keir Starmer’s campaign, is proposing to scrap Angela Rayner’s workers’ rights agenda
- The proposal suggests introducing "easy firing" and ditching 80% of Rayner’s regulations on business
- The plan would be funded by higher taxes on firms and workers to fund a new scheme of unemployment insurance
- The think tank argues that the current Employment Rights Bill is a "safety blanket" that "saps dynamism" from the economy
- The proposal is likely to be highly controversial and could draw a new dividing line between would-be contenders for the Labour leadership
Introduction to Labour Together’s Proposal
The think tank behind Sir Keir Starmer’s campaign for the Labour leadership, Labour Together, is canvassing support among MPs for incendiary proposals to scrap Angela Rayner’s workers’ rights agenda. An unpublished paper by the think tank, leaked to The Times, criticises the Employment Rights Bill as a "safety blanket" that "saps dynamism" from the economy. The paper calls on the government to embrace "easy firing" and ditch 80% of Rayner’s regulations on business, instead introducing higher taxes on firms and workers to fund a new scheme of unemployment insurance for those laid off.
The Proposal’s Key Points
The proposal, which was circulated among Labour MPs this week, is the most explicit criticism of Rayner’s agenda from within the party to date. The paper states that the government should "scrap 80% of the Employment Rights Bill and build out unemployment insurance". This could be funded by higher taxes on employers, which would be cheaper than the compliance cost of the Employment Rights Bill, and small contributions from workers. The think tank argues that Britain must take advantage of its "agility and openness" and double down on its economic strengths, aiming to have "the most flexible markets" of economic superpowers such as the US and China.
The Think Tank’s Vision for the Economy
Labour Together’s paper stresses that new technology makes the "creative destruction" of job losses inevitable, and that the government should aim to make it easier for companies to restructure their operations. The think tank argues that countries that make it easiest for companies to restructure their operations are also those that do the most R&D in frontier sectors like biotech. The paper also suggests ending all capital spending in the southeast of England, a proposal that has enraged Labour MPs in the region, and a new deregulation drive in the water, energy, and digital sectors.
The Inspiration Behind the Proposal
The paper explicitly cites Tony Blair’s government as an inspiration, stating that "Tony Blair was right" about the need for the UK to be at the frontier of technological revolutions. The think tank argues that the UK needs to harness these revolutions, not slow or stop them, and that the old growth model is gone. The paper calls on the government to "throw the might of the state" behind the Oxford-Cambridge corridor, with the aim of tripling its size with new housebuilding and commercial development.
The Potential Backlash
The proposal is likely to be highly controversial and could draw a new dividing line between would-be contenders for the Labour leadership. Any leadership candidate that did adopt the policy would likely face a fierce backlash from the party’s soft left, as well as the former deputy prime minister herself. A spokesman for Labour Together said that the paper was a "provocation for private discussion" and that the think tank "totally supports" the Employment Rights Act. However, the proposal has already sparked anger among Labour MPs, with some accusing the think tank of trying to undermine Rayner’s agenda.
Conclusion
In conclusion, Labour Together’s proposal to scrap Angela Rayner’s workers’ rights agenda and introduce "easy firing" is a highly controversial and divisive plan. While the think tank argues that the proposal would help to make the UK more competitive and agile, it is likely to face significant opposition from within the Labour Party. The proposal’s emphasis on deregulation and higher taxes on firms and workers is likely to be seen as a betrayal of the party’s values, and could damage the party’s reputation among its core supporters. As the Labour Party continues to debate its future direction, the proposal is likely to be a major point of contention.