‘The employment rights bill is good for business – but local authorities must drive the delivery’

As the Employment Rights Bill makes its way to becoming law, attention must now turn towards implementing it successfully. While the bill has been designed by central government, local authorities are best placed to drive its delivery if we are to ensure this crucial upgrading in rights benefits both working people and businesses.

A central purpose of the Labour Party and the trade union movement has always been to advance the rights of workers and the manifesto promise to deliver the “biggest upgrade to workers’ rights in a generation” was characteristically ambitious. Public support for the new Employment Rights Bill shows it is one of the Labour governments most popular policies which, if implemented correctly, can help the party win local and national elections when the time comes. 

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Despite this popularity and clear public consensus for change, the bill has still had its fair share of critics over the last year including from the Conservatives, Reform UK and more recently the Liberal Democrats. This should not come as a surprise. When the Labour government introduced the National Minimum Wage in 1999 it received similar criticism, not just from opposition parties but also some businesses who were unsure about the impact of increased salary costs. A generation on, the National Minimum Wage is now firmly rooted in our economy. 

Southwark – the area I represent as Cabinet Member for Climate Emergency, Jobs and Business – has a thriving local economy, supported by a diverse business community. The borough is a significant contributor to the UK economy, generating £1 in every £100 nationally, but small or micro businesses, those with fewer than 10 employees, still make up 95% of those based here. They are the backbone of our high streets, our communities and our local economy but I know some still have concerns that need to be addressed in delivery of this bill. 

These reforms follow the rise in employer national insurance contributions which took effect in April earlier this year which business owners tell me has resulted in them employing fewer people. This is seen nationally with the number of workers on company payrolls falling according to HMRC, a gradual rise in unemployment and monthly job postings trending downward. When businesses are uncertain about the economic landscape they reach for safety, making employers less likely to recruit or increase their workforce. 

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This risks undermining the government’s wider employment agenda, which they have made a central part of growth plans and include £500m investment into Connect to Work and the Youth Guarantee trailblazer scheme, aimed at supporting those facing the greatest barriers into work. The local delivery of these programmes has enabled strong collaboration with related employment services, agencies and partners but without employers creating and offering job opportunities government funding won’t achieve outcomes they are relying on to stimulate the economy.

This is where local authorities can help bridge the gap between central government and business to allay concerns. We understand our local communities and have existing relationships with Business Improvements Districts (BIDs) and other business forums, many of whom prioritise place based social impact and are able to disseminate information and guidance on what this means for local businesses. 

Bold employment reform is only as worthwhile as the availability of advice locally. Without this, businesses feel unsupported, and workers remain unsure about their rights. In Southwark, we have launched our ‘Know your worth, Know your Rights’ campaign so everyone understands their rights and starts preparing for the changes coming through this bill. It highlights local organisations where people can easily access confidential advice if they have work related issues and showcases local employers who are already demonstrating best practice when it comes to rights at work. 

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Local authorities can also help address some of the misconceptions that surround elements of the bill. Lessons can be learnt from the Living Wage movement. In Southwark, we are working towards a manifesto commitment made in 2022 to double the number of accredited employers who pay the London Living Wage, addressing low pay and lifting people out of in work poverty. Paying the London Living Wage doesn’t just benefit employees though – accredited employers also see improved staff retention and perhaps more relevant to the goal of growing a stronger and more resilient economy, higher productivity. 

The Employment Rights Bill includes reforms that will improve people’s lives and offer greater security at work. Enabling local authorities to lead on its delivery can ensure it has the same transformative legacy as the National Minium Wage. 

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