A think-tank instrumental in Sir Keir Starmer's rise to the Labour leadership has privately delivered a stinging critique of Deputy Leader Angela Rayner's flagship workers' rights agenda, just days after her Employment Rights Bill became law.
Internal Paper Calls for 'Easy Firing' and Scrapping Regulations
Labour Together, the group which masterminded Sir Keir's successful 2020 leadership campaign, circulated a provocative paper among Labour MPs this week. The document described the newly enacted legislation as a 'safety blanket' that 'saps dynamism' from the UK economy.
In a direct challenge to the agenda championed by the former Deputy Prime Minister, the paper argued the Government should ditch 80 per cent of the new regulations the law imposes on businesses. Instead, it controversially proposed embracing 'easy firing' while compensating laid-off workers with a state-backed unemployment insurance scheme.
The timing of the paper's circulation was highly significant, coinciding with the Employment Rights Bill clearing its final parliamentary hurdles earlier this week. The bill's passage followed a stand-off in the House of Lords, which forced ministers to dilute some of its promised 'day one' protections for employees.
'Tony Blair Was Right': A Rebuke to the Party's Left
The internal critique opened with the pointed declaration 'Tony Blair was right', a phrase widely interpreted as a deliberate rebuke to left-wing figures in the party like Ms Rayner. It accused ministers of 'going backwards on labour market regulation', despite acknowledging progress in other areas like planning reform.
This intervention adds to a series of actions by Labour Together that have stirred internal party tensions. Recently, the think-tank fuelled speculation about Sir Keir's future by surveying members on their preferred candidates in a potential future leadership contest.
Think-Tank Insists It Supports the New Law
Following a report by The Times on the paper, sources close to Labour Together moved to clarify its position on Friday night. They insisted the think-tank was not calling for the new Employment Rights Act to be scrapped, but was instead exploring long-term ideas for a future political economy centred on innovation and technological change.
A spokesman for Labour Together stated: 'Labour Together totally supports this week's Employment Rights Act. This paper was a provocation for private discussion about how to build a political economy centred on technological change and innovation.'
The spokesman added that the paper looked beyond current policy to explore ideas for spreading investment outside the South East and supporting workers through 'a bigger welfare state rather than regulation alone'. However, they conceded that such a welfare state was 'far away' given the inheritance from the Conservatives, and affirmed that the new Act was 'the best way to give workers much more security now.'
The episode reveals the ongoing ideological tensions within the Labour Party, as it balances its traditional commitment to workers' protections with a modernising agenda focused on economic growth and flexibility.
