A think tank that was instrumental in Sir Keir Starmer's campaign to become Labour leader has drafted a controversial paper calling for the vast majority of Deputy Prime Minister Angela Rayner's flagship workers' rights agenda to be dismantled.
Internal Criticism of the Employment Rights Bill
The unpublished document, produced by Labour Together, takes aim at the reforms within the Employment Rights Bill, which is scheduled to become law in January. The paper argues that the measures "sap dynamism" from the UK economy and recommends that approximately 80 per cent of them should be scrapped.
While Labour Together confirmed it authored the paper, it described the work as a "provocation" intended to stimulate discussion about future policy, not current legislation. A spokesman stated: "Labour Together totally supports this week’s Employment Rights Act."
Proposals Risk Major Party Row
These proposals threaten to ignite a significant internal conflict within the Labour Party. The tension emerges amid speculation that a challenge to Sir Keir Starmer's leadership could materialise following May's local elections, which many predict will yield poor results for the party.
This stance directly contradicts Sir Keir's own recent praise for the reforms, which he hailed as "the biggest upgrade to workers’ rights in a generation." Trade unions have celebrated the bill, highlighting its measures to:
- Ban exploitative zero-hours contracts.
- Create statutory sick pay for all workers.
- Repeal restrictive anti-union laws.
Conversely, business groups have warned that the new regulations could suppress job creation and hinder economic growth.
Think Tank's Controversial Vision
According to The Times, which saw the document circulated to some Labour MPs, the paper claims the reforms have set the government's economic agenda "going backwards." It advocates for ministers to embrace "easy firing" policies, arguing this would lead to "easy hiring" and benefit both companies and employees.
To fund a more robust unemployment insurance system for those who lose their jobs, the paper suggests hiking taxes on both firms and workers. It posits that new technology makes job losses from "creative destruction" inevitable and urges the UK to develop labour markets as flexible as those in the US and China.
The document, titled "The brave churn of technology — a political economy for Labour in the 21st century," opens with the declaration: "Tony Blair was right." It also controversially proposes ending infrastructure spending in the Southeast of England, stating the region can "pay for its own stuff."
Leadership Speculation Intensifies
This intervention follows revelations last week that Labour Together had been canvassing party members on potential candidates to replace Sir Keir Starmer, signalling deepening concerns about the Prime Minister's beleaguered position.
The think tank, formerly run by Sir Keir's chief of staff Morgan McSweeney, sought activists' views on several senior Labour figures. Those named included cabinet ministers Wes Streeting, Shabana Mahmood, Bridget Phillipson, Ed Miliband, and Darren Jones, as well as former deputy PM Angela Rayner, Greater Manchester Mayor Andy Burnham, and deputy Labour leader Lucy Powell.
Sir Keir recently stated that the "hugely talented" Ms Rayner would return to his cabinet, fuelling rumours she might mount a leadership bid, potentially on a joint ticket with Wes Streeting.
When questioned about his former deputy, the Prime Minister said: "Yes, of course I do. I was really sad that we lost her... She’s hugely talented." He has also robustly defended the workers' rights reforms, asserting, "I couldn’t be prouder to lead the government that made this happen."
A Labour Together spokesman reiterated: "This paper was a provocation for private discussion about how to build a political economy centred on technological change and innovation... The Employment Rights Act is the best way to give workers much more security now."
