No. 10 undid the “half-baked” Rees-Mogg labor market reforms

Liz Truss, Britain’s Prime Minister, has scrapped a series of “half-baked” ideas put forward by Business Secretary Jacob Rees-Mogg to radically reform Britain’s labor market.

According to senior government insiders, Rees-Mogg wanted to restrict rights in the workplace, including introducing a form of no-fault termination for higher earners and ending the 48-hour week.

The Business Secretary’s proposals to the Prime Minister are part of the government’s ‘growth boost’ as it seeks to convince financial markets it can fund more than £40bn in tax cuts.

But a No10 source said Truss’s enthusiasm for deregulation had its limits: “Several unworkable and half-baked ideas were proposed and rejected.”

In a sign of political tensions with Rees-Mogg, the source added: “The Prime Minister wants to ease the burden on small businesses but there will be no campfire of employment regulation.”

Since the 2016 Brexit vote, union leaders have been nervous about the possibility that the Conservative government could cut workers’ rights after the UK leaves the European Union.

As well as introducing no-fault redundancies for people earning more than £50,000 a year, Rees-Mogg proposed scrapping company reporting requirements for the gender pay gap and the speed at which companies pay their suppliers, people said with knowledge of the discussions.

The business secretary has also proposed scrapping rights allowing agency workers to ‘pass’ to full employment rights, along with repealing the Working Time Directive.

The package would have provoked a hostile reaction from unions, who are currently voting to strike across much of the UK economy, including railways, healthcare and the postal services.

But Truss’ allies said Rees-Mogg’s ideas were either immature or unacceptable. The Prime Minister has said she will not touch anyone’s holiday entitlement or make any significant changes to the Working Time Directive.

The idea of ​​stripping workers who earn more than £50,000 of labor rights is still in play, but government officials said any threshold would need to be set at over £100,000 if it were ever to be implemented.

Rees-Mogg allies believe such a move would be acceptable because many people with higher salaries would have transferrable skills and could more easily move to other jobs.

Frances O’Grady, general secretary of the Trades Union Congress, said the government appeared determined to tear up workers’ “hard-won” rights.

“Once again we are seeing reckless and cynical measures – cutting workers’ wages and conditions – being rushed through without consultation and without real thought about the impact on working people,” she said. “Not content with disrupting the economy, ministers want to turn back the clock on workplace rights.”

In January 2021, the FT revealed that Boris Johnson’s government was planning a post-Brexit overhaul of labor laws, only for Downing Street to insist it would “not weaken workers’ rights”.

Despite those assurances, this April Johnson quietly drafted a package of measures to water down rights in the workplace, according to three Whitehall officials with knowledge of the discussions.

Rees-Mogg, an ardent Brexit supporter who was most recently Minister for Brexit Opportunities, has previously promised post-EU deregulation can bring a “productivity boost” to the UK economy. He has also previously campaigned for the repeal of the Working Time Directive

Allies of Rees-Mogg confirmed that the submissions to Truss at Number 10 were made in the spirit of a cabinet minister “offering ideas to his prime minister”.

Some senior government officials have complained that Downing Street does not fully agree with their proposals for sweeping deregulation.

In other areas where it had promised to strengthen workers’ rights, the government has already backed down.

The Conservative Party’s 2019 manifesto said it would “promote flexible working and advise to make it the norm unless employers have good reason not to.”

But this spring the government dropped a long-awaited employment bill that government officials said would have included the flexible-work commitment featured in Mai’s Queen’s Speech.

The belated law, first announced in the Queen’s 2019 speech, aimed to make more predictable contracts, a single body to enforce workers’ rights, protections for pregnant workers and flexible working the default option. No. 10 undid the “half-baked” Rees-Mogg labor market reforms

Adam Bradshaw

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