How Labour's New Deal could resurrect old problems

Unions predictably - and correctly - condemned the attempts by Mandelson and the business lobby to stymie what is just about the only progressive item left in the Starmer suite of policies that Labour will fight the forthcoming General Election on. They called upon Starmer to stand by what is the key policy platform which justifies the support of the union movement.

Intriguingly, Starmer and his Labour lieutenant, shadow chancellor of the exchequer Rachel Reeves, have doubled down on their commitment to the New Deal for Working People. They have, accordingly, argued paid work must really pay in order to boost the productivity of the economy and rights for workers are central to achieving this.

In doing so, they have reinforced Labour deputy leader Angela Rayner’s commitment to legislate for the New Deal for Working People within the first 100 days of a Labour government. Last September, she gave a "cast iron guarantee" to do so at the Trades Union Congress (TUC). And, the New Deal for Working People itself states: "From day one, a Labour government will strengthen workers’ rights and make Britain work for working for people."

All good so far then? The salient story is not then so much about whether Starmer will or won’t weaken Labour’s position on workers’ rights. That’s not to discount this distinct possibility. Rather, it’s actually more about whether Labour has, somewhat ironically, promised too much too quickly, with corrosive consequences. In making an eye-catching commitment which is bold, it’s also been brash and rash.

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The way to understand why Labour’s New Deal for Working People presents this particular paradox is to recognise how comprehensive the proposals actually are.

They cover both individual and collective rights as a result of the unions affiliated to Labour working through a process with the leadership since 2019. This came to fruition in 2021 with the publication of the agreed document, covering the repeal of the then most recent anti-union law, introducing the right of workplace access for unions to recruit members, making the right to union recognition more effective, and allowing sectoral bargaining and Fair Pay Agreements. The document also includes pledges to end "fire and re-hire", zero-hour contracts and bogus self-employment and much, much more.

The problem then arises that there is way too much to do in a single Employment Rights Act, even one that is an enabling Act. This is because much of what needs to be done will require primary legislation - and not tinkering with regulations through ministerial instruction known as secondary legislation. That requires space in the parliamentary timetable when there will be other contending pressures on Labour in the form of the likes of the NHS, education and transport.

But there are other problems too. Although Labour is still in opposition, it entitled the New Deal for Working People as a Green Paper. In parliamentary protocol, a Green Paper is one issued by the party in office which sets out for discussion proposals which are still at a formative stage.

Once this stage has been reached and there has been refinement and finessing, a White Paper is issued by the government as a statement of policy which ordinarily sets out proposals for legislative changes and which may be debated before a bill is introduced before Parliament. This challenges whether the stated commitment of the 100-day schedule is feasible with such a wide-ranging set of proposals.

Drawing up draft parliamentary legislation is a long and time-consuming business. Presently, Labour in opposition does not have the resources of the civil service to begin doing so. Indeed, even though lengthy, the New Deal for Working People is - as to be expected - bereft of detail because a Green Paper is no more than an outline of intentions. And, pretty much all Labour’s available resources are being thrown into winning the election itself. If the election comes later rather than sooner, this will not change the paucity of resources.

Peter Mandelson has criticised the proposals (Image: Agency)

The only way around this is either set the 100-day deadline back considerably or make it clear that the process of reform will be a gradual piecemeal one rather than a single "big bang". That would not be to renege on the substantive commitment made per se. Nonetheless, it would not only look like reneging but also reneging under the business lobby’s pressure.

This scaling back may come about through creating the election manifesto which, covering the whole gamut of issues, would have even less space to deal with employment issues than the New Deal for Working People has had already.

Normally, as the saying "the devil is in the detail" goes, the exact complexion of what the New Deal for Working People will end up being as a bill is still be to ascertained. But the more pressing problem for Labour is that it has made an unwise and foolish promise about how quickly it will deliver upon it.

If, as expected, it does not deliver within 100 days, the accusations of backsliding will be brickbats thrown at the heads of Starmer, Reeves and Rayner. An Employment Rights Bill which concentrates upon banning zero-hours contracts, ending fire and rehire, and scrapping qualifying periods for basic rights and precious little else will justify those brickbats.

With expectations raised unrealistically, there will be deleterious repercussions for the relationship between Labour and its union affiliates. We could see the rapid rise of a new "awkward squad" of union leaders like the one Blair faced in the early 2000s. Troubled times lay ahead.

Professor Gregor Gall is a research associate at the University of Glasgow and author of "Mick Lynch: The making of a working-class hero" (Manchester University Press, 2024).