As the UK economy grinds to a halt mere months into Keir Starmer’s tenure as Prime Minister, his Labour government is facing mounting pressure from the business community to water down ambitious plans to boost workers’ rights and job security. But in his New Year’s message, Trades Union Congress chief Paul Nowak is urging Starmer to hold firm and prove that Labour can “deliver” for working people in 2025.
Nowak argues that Labour’s sweeping employment reforms – which include banning zero-hours contracts and providing job protections from day one – were a central pillar of the party’s winning electoral platform. Retreating now in the face of corporate opposition would only fuel public “cynicism” and bolster the anti-establishment populism of Nigel Farage’s ascendant Reform UK party.
“That whole agenda around improving the world of work was a key reason why Labour won the election… If it’s not delivered in full, it will fuel that cynicism that politics can’t make any difference; that it doesn’t matter who you vote for because ‘they’re all the same.'”
– Paul Nowak, TUC General Secretary
Business Backlash Over Budget
Nowak’s intervention comes as Starmer’s government faces an intensifying backlash from employers over the Chancellor’s autumn budget, which imposed a £25 billion hike in national insurance contributions to shore up public finances. Business groups like the CBI have slammed the tax increases and tough rhetoric from Rachel Reeves, warning it will chill hiring and investment amid an already bleak economic outlook.
Some corporate leaders are now explicitly demanding concessions on the planned employment law overhaul as a “quid pro quo” for swallowing the new levies. But Nowak says this pressure campaign is “pretty crude” and that watering down workers’ rights to placate business would be “the worst of all possible worlds.”
Sticking to Campaign Pledges
While acknowledging that Labour’s job security agenda could add up to £5 billion in annual costs for businesses, the TUC maintains that the broader economic benefits would far outweigh this impact. Nowak points to internal union analysis suggesting the reforms could ultimately boost consumer spending by £13 billion as more workers gain access to stable, better-paying jobs.
“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… Frankly those voices that are saying water down the employment rights bill… have opposed every progressive change in employment rights since time began.”
– Paul Nowak, TUC General Secretary
As the Starmer government faces its first major test in office, the trade union movement is closing ranks to ensure the Prime Minister doesn’t backslide on his core commitments to working families. In Nowak’s view, Labour must “hold its nerve” in the face of business discontent and decisively follow through on the vision that propelled it to power – or risk squandering its electoral mandate and unleashing a new wave of political disillusionment.
The battle lines are drawn, and Starmer’s daunting task is to prove his skeptics wrong by showing that even in tough times, a Labour government can still be a vehicle for positive change in the lives of ordinary workers. As the TUC chief warns, nothing less than the future of progressive politics in Britain may hang in the balance.
