Exclusive: Peter Kyle says Employment Rights critics ‘come from certain educational backgrounds’
Business secretary Peter Kyle has dismissed critics of the Employment Rights Bill as people on an “above average income” and those who have not had an “ordinary experience in the economy”.
Labour’s workers’ rights package has faced staunch opposition from CEOs as well as top business groups including the Federation of Small Businesses (FSB) and the British Chambers of Commerce (BCC) for piling extra regulatory burdens on firms. Many economists have warned the reforms will damage growth, adding billions of pounds in costs to employers.
But in a leaked recording from a fringe event during the Labour Party’s conference in Liverpool, Kyle brushed off opponents to the government’s workers’ rights package as misunderstanding the livelihoods of people in the “ordinary economy”.
He told an audience that legislation, which is nearing its final stages in parliament before getting royal assent, would be a “sort of rebalancing” of the UK economy and “not in any way intended” to stifle investment.
“The challenge whenever we have these debates is that most people who commentate, write and talk about this are not having an ordinary experience in the economy,” Kyle said.
“They usually come from certain educational backgrounds and they’re certainly above average income.”
Kyle’s comments are likely to raise eyebrows among industry chiefs given the barrage of warnings issued by businesses that the policies in the bill will crush a jobs market already weakened by Chancellor Rachel Reeves’ £20bn tax raid on employers last year.
It also tests Labour’s definition of “working people” and raises questions over the extent to which ministers are prepared to listen to employers.
A source close to Kyle said he was referring to criticisms made by columnists, commentators and MPs rather than by officials at business groups.
In the same answer, Kyle gave an example of where he thought public debates on the role of the state in the UK economy were misguided.
He alluded to one of his past appearances on BBC Question Time where he believed audience members commenting on Brits “taking the mickey out of the benefits system” were themselves likely to have been earning above average income.
“I looked at the audience and I would have been amazed if there was anyone on the audience that wasn’t on the panel that was anywhere near average income, let alone low income.”
He said legislation would address “what life was like in the ordinary economy at the moment”.
Peter Kyle slammed for ‘sneering at critics’
Shadow business secretary Andrew Griffith said Kyle had chosen to “sneer at critics and brush off the human cost of [Labour]’s policies with his comments,” adding that 276,000 jobs had been lost since last year’s Budget due to the government’s higher taxes and extra red tape.
“This trade union-inspired Bill is going to make that even worse, meaning more children growing up in workless households. Labour must throw it out and start again.”
The bill has faced strong opposition from top UK bosses while retailers and hospitality chiefs have criticised Labour figures for striking down proposed amendments to the bill.
A private letter signed by the likes of the BCC and the Confederation of British Industry (CBI) warned that new rights allowing people to sue employers for unfair dismissal from the first day of work would have a “chilling” effect on growth while greater powers to unions could also slow down hiring levels.
The Office for Budget Responsibility, which has not provided a full assessment on the costs of the bill to the jobs market, has indicated that it would have a “net negative effect” on the UK economy. The government’s own impact assessment found the measures would add up to £5bn in costs to businesses.
But in a speech on Monday, Kyle declared he would “implement the Employment Right Bill in full”.
Labour’s defence of Employment Rights Bill
During the event, hosted by Visa, Kyle defended the Bill for its role in “updating” workers’ rights for the “age we’re living in”.
“It makes perfect sense for the vast majority of people and also people who are running businesses,” he said.
“If you have… the toxic impact of having a business whose ability to be profitable is on the back of people who have no security in the workplace, are on very low wages, and because of exploitative zero-hours contracts, often getting beneath the minimum wage, if you look at it over the course of a week, think of the impact that has on the rest of the economy.
“I want competition, but I don’t want competition based on one company that is innovating, that is investing in its workforce, not being able to be profitable because you’ve got another company that’s not innovating, that isn’t investing in its workforce.”
“Even Churchill was saying this stuff back in the day.”