Those trying to water down the Employment Rights Bill are growth blockers
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3 min read
The Employment Rights Bill has, predictably, been greeted in some quarters as though Angela Rayner has driven a tank through the front doors of the Treasury.
Many British commentators retain a touching belief that even the mildest extension of workplace protection will usher in economic collapse. One might have thought that the failure of the minimum wage to destroy civilisation would have dampened this enthusiasm. Not so.
Beneath the melodrama, the bill is something more prosaic and more important: a long overdue attempt to mend a labour market that has spent decades running on insecurity. Britain chose the low-wage, high-churn model and then wondered why productivity flatlined. It should not be controversial to observe that workers are more productive when they can predict next month’s pay packet. This realisation, though hardly revolutionary, places us closer to international norms and further from the belief that volatility is a sign of economic virility.
Ending exploitative zero-hours contracts, improving sick pay for the lowest earners, providing basic protections for pregnant women and bringing unfair dismissal rights forward to six months are not outlandish interventions. They are modest steps towards the settled practice of countries, from the Netherlands to Denmark, whose productivity has an annoying habit of exceeding our own.
Many of these noble legislators have not encountered insecure work in some time, which may explain the confidence with which they warn others of its supposed virtues
Yet the Upper House has been unusually excitable. Opposition has come not only from Conservative peers, but from Liberal Democrats and Greens, who appear to have concluded that job security poses an existential threat to economic dynamism. Many of these noble legislators have not encountered insecure work in some time, which may explain the confidence with which they warn others of its supposed virtues. In fact, they are the only section of the labour market to enjoy day one workplace rights until the day they die! Their arguments have been taken up with enthusiasm by Nigel Farage, who continues his long tradition of supporting workers in principle while objecting to any policy that might benefit them in practice.
More significant is the government’s decision to accelerate the bill’s implementation. Under the original timetable, workers would have waited until late 2027 to feel the effects of new unfair dismissal protections. Thanks to determined negotiation, not least by Angela Rayner, the date has moved forward. Anyone recruited from July next year will gain rights as soon as the legislation takes effect. I doubt businesses will complain about the clarity, and markets may even regard it as refreshingly straightforward.
Anchoring these rights in primary legislation should also reassure investors, who may enjoy many things but seldom list regulatory unpredictability among them. Certainty, after all, is the cheapest stimulant for economic confidence.
No one pretends that the bill will cure all Britain’s economic ailments. But dismissing it misses a basic point: countries that rely on precarious labour markets tend to find that precariousness reflected in their growth, investment levels and household resilience. A workforce that cannot plan its life is unlikely to deliver the productivity uplift the country so urgently requires.
Labour entered government promising to build a more resilient economy. The quiet truth about the Employment Rights Bill is that it supports that ambition rather neatly. It is both pro-worker and pro-growth. The sooner it is enacted, the sooner Britain can stop frightening itself with imaginary calamities and start behaving like a country serious about civilised labour practices and its economic future.
Anneliese Midgeley is the Labour MP for Knowsley
