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15 May 2024

Will Keir Starmer’s agreement with the unions last?

Labour is sticking by the New Deal for Working People for one big reason.

By Freddie Hayward

Labour drops policies when they jeopardise victory – or to put that more charitably, it strives to be as close to voters’ concerns as possible. For a political party 14 years out of power, you can understand the rationale.

This was one reason behind the U-turn on the £28bn of green spending. Labour strategists foresaw Tory attack lines that Labour would raise taxes to pay for it. By dropping the policy, they closed down that risk and took a big step towards the Conservatives.

With the £28bn junked, the question became: what next? Eyes turned towards Labour’s New Deal for Working People, a tranche of measures to improve workers’ rights. Labour MPs anxiously predicted its demise, as did some union leaders. Amid Labour’s love affair with the private sector, businesses started pushing for the proposals to be diluted.

All of which meant Keir Starmer’s meeting with union leaders yesterday to discuss the package was probably quite awkward. The deal had already been watered down last summer: for instance, fair-pay deals would only initially apply to social care, not all sectors. There were rumours Labour would dilute the measures, and the language around them, even further. But yesterday’s meeting recommitted both sides to last summer’s deal.

It must be judged a success. Unite’s general secretary Sharon Graham, a persistent Starmer critic, went from calling the package a “betrayal” a week ago to supporting the deal. “We’ve been listened to and the workers’ voice heard,” she told LBC. It is a strong sign that the relationship between Starmer’s Labour and the unions could be amicable.

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So why has Labour retained most of the New Deal for Working People, but jettisoned the £28bn? The main reason is that the New Deal costs much less upfront and therefore won’t breach Rachel Reeves’s fiscal rules. Second, Angela Rayner, who is responsible for the policy, believes in improving workers’ rights in the way that Reeves believes in fiscal orthodoxy. Rayner has a uniquely powerful position within the party as the independently elected deputy leader. Starmer does not want to pick a fight with her. Third, improving workers’ rights is popular – even with Tory voters, as a Savanta poll showed this week.

Having said that, remember that the line is the line until it is not.

This piece first appeared in the Morning Call newsletter; receive it every morning by subscribing on Substack here.

[See also: The Great Stink: Britain’s pollution crisis]

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