Our workers’ rights bill is good for business

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The writer is deputy prime minister and secretary of state for housing, communities and local government

All the best businesses know that their greatest asset is their people. Let’s face it, you’re more likely to be blazing a trail when you have skilled, motivated workers who feel valued behind you.

I’ve seen this from all angles throughout my career, as a home help in the care sector, a union rep, through my time in politics and now, leading a government department with employees spread across the country. No matter where I have worked, it’s clear that if you treat people well, ensure they get fair pay for a fair day’s work and the respect and dignity they deserve, everyone gains: businesses, workers, the British economy and our communities.

The UK’s outdated framework for labour market regulation has failed to keep pace with new technology, new ways of doing business and new ways of working. Combined with a non-existent industrial strategy and sclerotic planning regulations, our economy has failed to keep pace with a changing world, while the good jobs and opportunities in the industries of the future too often passed us by. This has strangled growth, stifled productivity and left us with a low-wage economy that serves no one.

Labour was elected on the promise to halt this spiral of decline, and upgrade in-work security for the 21st-century economy. That’s why this week’s introduction of our employment rights bill marks a momentous opportunity to chart a new route to growth in tandem with the other planks of our modern, supply-side approach, which includes planning reform, kick-starting a skills revolution, a modern industrial strategy and a plan to tackle inactivity.

Shortly before Labour left office in 2010, wages were rising at one of the fastest rates in the developed world; today, that rate is one of the slowest. In real terms, average salaries have barely increased from where they were before the 2008 financial crash. Insecurity at work is also rife, with too many workers unable to plan their lives around their jobs.

That’s bad for business, bad for working people and bad for the economy too. And it is why the current Labour government was elected on the promise to restore the principle that work should always pay, and build an economy fit for the future. That means creating jobs that provide security, treat workers fairly and pay a decent wage. Our plan to ensure that work pays will support employers and businesses across the country, creating a level playing field and modernising the world of work.

This week’s bill sets out to upgrade our employment rights framework and respond to the changing world of work. We will help more people get in to work and progress, making flexible working the default, establishing a new right to bereavement leave, making paternity and parental leave available from day one of starting a new job, and strengthening the protections for pregnant women and new mothers returning to work.

But our plan will be the start of a new era of partnership between business and workers too. It turns the page on the counter-productive approach to industrial relations that hit workers, public services, and taxpayers with the worst disruption in decades. In place of disruption, the government will work with businesses, trade unions and other stakeholders to deliver our mission on growth.

We know that businesses are proud to treat their staff well and know it makes good business sense too. Our reforms will raise the floor and end the race to the bottom that saw some compete based on low pay, low standards and insecurity. The legislation will also level the playing field, ensuring that good employers aren’t undercut by bad ones, so all businesses can compete in quality and innovation.

Recent polling from the think-tank IPPR and the Trades Union Congress has shown that the overwhelming majority of managers and senior decision makers believe our reforms — including increased access to sick pay from day one and a ban on exploitative zero-hours contracts — will have a positive impact on productivity.

Finally, we will reform the labour market’s fragmented and ineffective enforcement system. The new Fair Work Agency will bring together existing enforcement functions to create a strong, recognisable single brand so individuals know where to go for help. Companies who do the right thing by their workers will no longer be undercut by those with low standards.

Ultimately, whether you’re in government, a FTSE 100 CEO or a union rep, we all want the same things: stronger growth, higher living standards and more investment and opportunities to power a national renewal. The British people expect us to all work together to deliver on this. I will do my utmost to make it happen.