Rachel Reeves says good bosses have 'nothing to fear' over Labour's workers' rights reforms

Shadow Chancellor Rachel Reeves said workers rights were a critical part of Labour’s election offer

Rachel Reeves has said good bosses have “nothing to fear” from Labour’s workers’ rights reforms which she admitted won’t completely outlaw zero-hours contracts.

The Shadow Chancellor insisted Labour was committed to the package, first proposed in 2021, which would give all workers employment rights from their first day in a job and impose a ban on zero-hours contracts. But she confirmed that some workers could stay on zero-hours contracts if they want, which critics have described as a loophole in the plans.

Labour’s trade union backers endorsed the New Deal for Working People last year, and several general secretaries have broken cover in recent days to warn the party against watering down the plans. But insiders insist that Labour is committed to delivering the reforms as promised, in a way that works for businesses and workers.

Asked by the Mirror if Labour was still wedded to the plan, Ms Reeves said: “I can commit that in the first 100 days of a Labour Government we will put forward legislation as we’ve already set out in the New Deal for Working People, including banning those exploitative zero-hours contracts. As I said in my speech today, not only is this the right and the fair thing to do, it is also good for the economy.”

Ms Reeves said the party was committed to bringing forward the deal “in full”. But she confirmed that it would stop short of an outright ban on zero-hours contracts.

She said: “The truth is that many, many businesses already go well beyond what is set out in the new deal for working people. They don’t have zero-hours contracts, they are not using practices of fire and rehire and they give better rights around sick pay for example.

“So businesses have got nothing to fear from the new deal for working people, but businesses who do use these methods, then there will be a level playing field to ensure that businesses can’t undercut each other by using zero-hour contracts or through fire and rehire.”

Pressed on the timeline for legislating, she said: “We will bring forward legislation in the first 100 days of a Labour government. Of course, we would then consult on that, both within those 100 days and afterwards as it goes through the normal parliamentary process.”

In a speech in the City of London, Ms Reeves tore into “deluded” Tories over their economic optimism and said a Labour Government wouldn’t do a “victory lap” if the UK gets to no growth from negative growth or finally hits the long-missed inflation target. She vowed to fight the general election on the economy and said the Government was “gaslighting” the public on the reality.

It comes as Mr Sunak was hoping for a glimmer of good news on the economy as he scrambles to get on the front foot after a disastrous set of local election results. The Bank of England will announce on Thursday whether it will cut interest rates, while economic figures on Friday could show the country is no longer in recession.

But Ms Reeves argued that the out-of-touch PM was wrong to claim that ordinary Brits would feel better off. “What success looks like is how people feel,” she said. “Whether there is money in their bank balance, whether they have enough to pay the rent, the mortgage, the bills and to have enough aside for the luxuries that make life worth living. And for too many people that that is just not the reality.

“When the Prime Minister and Chancellor say, ‘We’ve turned a corner, the plan is working, look out for the feel good factor’, I think that’s deluded and really out of touch with the realities people are facing. The mark of success if whether people feel better off.”

Ms Reeves was introduced by former Tory minister Nick Boles, who quit the Conservative Party in 2019 over Brexit and has been informally advising Labour on preparing for power.