CBI lobbying to ‘soften’ Labour’s workers’ rights pledges, FT reports.

New president warns against "European model"

8 Feb 2024| News

The Financial Times reports that the Confederation of British Industry (CBI) is “pushing Labour to soften potentially onerous laws on worker rights”:

Rupert Soames, who last week took over as president of the CBI, said the UK needed to avoid a “European model” of employment rights and resist excessive regulation that undermines productivity in order to rediscover its competitiveness. He added that the CBI was providing “private feedback” to Labour on its policy plans. The CBI wanted to help the opposition party avoid the “unintended consequences” of its plans to reform employment law, he said.

Soames said the “European model” of stronger worker rights was “really good for people who are employed but really bad for people who are unemployed because companies are terrified to take them on”.

Labour has pledged “day-one” employment rights, and a ban on zero-hours contracts and “fire and rehire” practices — policies that have alarmed some businesses.

At a Labour event for businesses last week, Keir Starmer said:

“We are going to level up workers’ rights in a way that has not been attempted for decades. And that might not please everyone in the room or the wider business community.”

But CBI President Soames said he saw room for compromise.

“I see every indication that provided we understand their objectives, we can maybe help on areas of unintended consequence.”

The CBI is playing up the ties that the organisation has built with Labour, which will be crucial if Starmer becomes prime minister later this year. Some business leaders have privately questioned the need for the CBI because of the level of good access they themselves now enjoy to Conservative ministers and, in particular, shadow ministers in the opposition Labour party. Both parties are keen to woo companies but businesses “should not kid ourselves” that this would be the norm under a Labour government, Soames said.

Some companies may feel that “Keir’s on [their] speed dial” because the opposition was currently being very open with businesses, he said.

Soames warned that this would change if Labour was elected because:

“parties campaign in poetry, but they govern in prose. The WhatsApp group that you’re running with various members of the Labour party — if you think that’s going to survive ministerial power, let me tell you [it won’t].”

The FT continues:

Soames, grandson of Winston Churchill, said the CBI’s aim was to make sure policies worked as well as possible “within the context of what [politicians] want to achieve”. “The Labour party have been ahead of anybody else in publishing their thoughts and manifestos on this. So, not unnaturally, they’re the first one that get the benefit of CBI commentary on it,” he said.

A Labour spokesperson said the party’s “New Deal for Working People” would “make work pay, by boosting security at work, ensuring fair wages and modernising UK labour market regulations”, and was part of a broader plan to boost economic growth and end low productivity. “As a pro-worker and pro-business party, we engage with numerous organisations — who should be in no doubt that our New Deal for Working People will be a core part of our offer to the country,” the spokesperson added.