UK (Parliament Politics Magazine) – Sir Keir Starmer’s government is facing pressure from business leaders to stay firm on worker’s rights as the UK economy slows.
The TUC leader, Paul Nowak argued that company bosses are pushing for trade-offs in return for accepting the tax hikes proposed in Chancellor Rachel’s autumn budget, as worries grow over the UK’s economic slowdown.
Mr Nowak, in his New Year’s message to The Guardian, urged that Labour must prove next year will be “a year of delivery” following its half year in office dealing with urgent issues.
He said that advancing significant employment changes, like banning zero-hours contracts and securing day-one job protections, must be the focus of Labour’s government to stand against Nigel Farage’s Reform Party.
Paul Nowak stated, “That whole agenda around improving the world of work was a key reason why Labour won the election. In the face of the populist right of Reform, the government has to prove it is not only serious about delivering its manifesto commitments, but that they’ll have a tangible difference on people’s lives.”
As reported by the BBC, several of Mr Nowak’s member unions are considering resuming protests if Labour does not allocate more financial contributions.
After the revision of economic growth to zero since Labour’s taking office, ministers are now facing growing pressure to alter their approach, while the Bank of England expects no improvements in the final months of this year.
While ministers have suggested a 2.8% increase for the coming year, a little higher than the current inflation rate of 2.6%.
Mr Nowak in his message to ministers stated, “It’s hard to see how a 2.8% rise addresses the recruitment and retention crisis across the public sector, with 150,000 staff vacancies in the NHS alone.”
The government has pledged to revamp public services but stressed that pay raises should be equitable for employees and taxpayers.
Companies heads have expressed concern that Rachel Reeve’s tough strategy and the £25bn rise in employer national insurance contributions (NICs) ready to begin in April, will threaten job opportunities and economic progress.
Earlier this week, the CBI lobby group warned that Britain is “headed for the worst of all worlds” in 2025, as businesses prepare to reduce output and hiring while increasing costs to manage upcoming changes.
According to government estimates, firms could face up to £5 billion annually to improve employment rights. Ministers highlight the expense is a minor fraction of the 1.3 trillion wage bill recorded in 2023, and argue the reforms could deliver potential benefits to low-paid workers.
Last month, the CBI’s head, Rupert Soames, criticized ministers for treating businesses as a “cash cow” and insisted on the government for the planned reforms to employment rights.
Paul Nowak stated TUC survey reveals voters back the planned reforms. Union-backed analysis suggests the changes could add £13 billion to the economy by enhancing workers.
He added, “When people are in better paid secure employment they’ll go out and spend that money in local shops and restaurants, buy a new car, or have extensions done on their homes or whatever that might be.”
Mr Nowak rejected the Conservatives’ claim that the inflation-beating pay hikes this year were achieved by reducing winter fuel payments of pensioners.
He has been associated with the TUC for almost 25 years, including holding the role of deputy general secretary from 2016 until early 2023.
The TUC hopes to sway ministerial decisions, though it’s evident their perspectives won’t always align.
The government argues that moving to renewable energy will not only drive funding but also create jobs, and revive industrial hubs in Britain.