Labour’s Next steps to make work pay is driven more by the need to make workers more productive than to increase their power, argues John Westmoreland

The day after Labour revealed its workers’ rights policy document Next steps to make work pay, we need to focus on what is driving this legislation before we get into the details of what it proposes to do.

Labour’s claims to be a party of the working class are only credible to those desperate to be convinced. A party dedicated to fiscal responsibility, arms spending, economic growth and ‘tough decisions’ that threaten our public services with cuts and further privatisation is not on our side.

Objectors will counter this by saying that Labour is making a big change to the existing state of workers’ rights, and even if it doesn’t go far enough, we should welcome it. But while we agree that extending rights to paternity leave and secure contracts of employment are a step forward, it is a very small step, and does not herald bigger steps coming our way down the line.

There are two factors driving this legislation, and confronting the capitalist class is not one of them. Both are framed by the crisis of British capitalism, one feature of which is low productivity. The first factor driving the legislation is the need to get the trade unions on side in order to facilitate the second factor: exploit our labour more effectively.

Getting more work out of us

The low productivity of the British economy is due to a number of reasons, one of which is the unwillingness of capitalists to invest in infrastructure, training and development. When profits have been handed to business straight from the Treasury’s coffers – think the water companies, rail companies or Baroness Mone – the need to compete in the marketplace is replaced by lobbying for government pay outs.

But Starmer and Reeves are not out to nail the lazy capitalists and make them pay. They are all for giving them therapy that will involve some very mild changes to their regimen and more capital injections to modernise Britain’s creaking infrastructure. Starmer and Reeves want a can-do state that will use intervention to get British capitalism up to scratch. And to do that they need the cooperation of the bosses and the unions.

As Jonathan Reynolds, the Business Secretary, said of Labour’s Next steps to make work pay, ‘This is a pro-worker, pro-business plan. The government will tackle head-on the issues within the UK labour market that are holding Britain back’.

This is saying it explicitly; social and economic justice is not the primary concern, productivity is. For the past ten years, commentators have been linking the fact that the UK has some of the worst labour rights in the world with low productivity. This Bill is about making workers happier to make them more productive.

What is and isn’t on offer?

Some trade-union leaders have talked up what’s on offer in Labour’s Bill. Matt Wrack has called it a ‘seismic shift’ in workers’ rights. That might be going a bit far. 

As the proverb has it: ‘In the desert, a blade of grass might seem like the cedars of Lebanon’. A report by the Institute for Employment Rights published a report in 2020 that said workers’ rights in Britain were on a par with Saudi Arabia, North Macedonia and Cameroon. So any step in the direction of a modern capitalist economy might seem ‘seismic’. And what is on offer can be seen as an attempt to modernise labour relations in the UK with a framework that gives workers some protections against the vagaries of the system, while not doing this in a way that threatens profits.

Day-one rights to protection against unfair dismissal, for paternity and parental leave as well as leave for bereavement are sensible steps to check the detrimental effects of an unregulated labour market. Giving entitlement to sick pay from day one is also a benefit to businesses and workers because it helps to keep infection out of the workplace, and gets workers fit for work.

But that is it for now. Many of the key issues that unions wanted in the Bill are subject to further negotiations. Much of the Bill will not be implemented before August 2026, when an enforcement agency will be empowered to supervise its application.

We don’t know how this will pan out. On dismissal during an employee’s probation period, ministers are in favour of a ‘lighter touch’ approach to employers who are unhappy with the person they took on. It doesn’t take a lot of imagination to work out what might make the employer unhappy. Bosses will still be able to set targets and demand compliance.

On the much-hated zero-hours contracts, some rights look certain to come our way such as guaranteed working hours. But again, there are ways round this. Employees can opt to remain on zero hours if they so choose, and they can be encouraged to choose. Similarly fire and rehire is going to be banned, but with a get-out clause. If the business is in danger of going bust, fire and hire (under a different name) will be allowed. 

Giant corporations like P&O Ferries who have used these tactics before are unlikely to cooperate now, and workers will still have to fight rather than wait for some lengthy legal settlement to play out.

All those in favour

The bosses’ CBI has given the Bill a big thumbs-up, and has praised the government for engaging with them and the unions. Their approval is worth much more than the complaints from the Federation of Small Businesses that the new measures will leave their members ‘scrambling to make sense of it all’. They shouldn’t bleat too loudly though. The much-vaunted ‘day-one rights’ that the Bill proposes, won’t come into effect for two years. I’m sure there is a good joke in there somewhere.

Trade-union leaders are also generally keen to show their support. The TUC’s general secretary, Paul Nowack, was enthusiastic and completely onside with marrying workers’ rights to productivity. ‘After 14 years of stagnating living standards, working people desperately need secure jobs they can build a decent life on. Driving up employment standards is good for workers, good for business and good for growth. It will give workers more predictability and control and it will stop good employers from being undercut by the bad. While there is still detail to be worked through, this Bill signals a seismic shift away from the Tories’ low pay, low rights, low productivity economy’.

Matt Wrack, general secretary of the FBU, also backed the Bill. ‘This very significant extension of workers’ rights is a huge victory for the FBU and other unions that have been at the forefront of campaigning to ensure that Labour’s New Deal for Working People is fully delivered. The banning of zero-hour contracts, the outlawing of fire and rehire, and other despicable working practices promoted by the Tories, are long overdue.’

With the CBI and the TUC backing the Bill, Starmer and Reeves must be feeling pretty chuffed. But the outcome is a long way off being settled.

And those against

The most vocal critic from the trade unions so far, has been Sharon Graham of Unite, who has continued to call out the Bill as having ‘more holes than Swiss cheese’. Her criticisms are telling. For example, the failure to end zero-hours contracts and fire and rehire ‘once and for all’ will allow hostile employers to work around the legislation.

However, the most glaring deficiencies in the Bill are those regarding trade-union rights. While the Bill is getting rid of Sunak’s draconian and unworkable Minimum Service Levels laws, it fails to give workers the right to trade-union bargaining over pay and conditions. Poverty pay amid rising living costs can only be solved by proactive trade unionism. Goodwill between the Labour government and the bosses will count for nothing.

The shackles of the anti-trade-union laws need to be broken so that workers can lay claim to their rights and proactively defend them. Rights without power are no rights at all.

Rank-and-file trade unionists cannot afford to leave the fight for workers’ rights to the government and their supporters in the trade-union bureaucracy and the CBI. War abroad and austerity at home is the maelstrom in which workers are living their lives. The Next steps to making work pay is a containment strategy that aims to get the trade-union leaders on side in the hope that they will gratefully police the membership. We might get something from this Bill in two years’ time, but the truth is we haven’t got time to wait.

The bosses are forever making plans about how they can exploit us more and we need our next steps to go in a different direction to Starmer and Reeves.