Starmer facing Labour backlash over ‘sellout’ U-turn on employment rights bill – UK politics live

8.51am GMT Good morning. Keir Starmer and Rachel Reeves spent yesterday denying that Labour broke a manifesto promise with its tax-raising budget. Given that Reeves had been expected to freeze income tax thresholds for weeks, it was a rather stale argument that did not go anywhere new. Then, late yesterday afternoon, the government opened up another broken manifesto argument with a surprise announcement about a U-turn on the employment rights bill. Here is our overnight story by Jessica Elgot and Richard Partington. Related: Government to ditch day-one unfair dismissal policy from workers’ rights bill It is not hard to see why ministers agreed to the concession. Day one protection from unfair dismissal was very unpopular with employers, who said it would deter firms from hiring new workers. With unemployment rising, and the hospitality sector in particular alarmed about the implication of some of the measures in the budget, this is a concession that will significantly ease business concerns about the legislation. And most unions seem willing to accept the climbdown as the price for getting the bill into law quickly. But it still came as a surprise. On Monday No 10 was telling journalists “we will overturn all attempts to scupper [the employment rights bill plans] including watering down Day 1 protection from unfair dismissal”. Governments regularly make concessions when legisalation is going through the House of Lords, but this bill is at the “ping-pong'” stage and MPs have already overturned the Lords amendments blocking day one protection from unfair dismissal twice. This is a Labour manifesto commitment; by convention, the Lords was obliged to back down. But there is evidence is becoming increasingly belligerent (on other bills too), and ministers decided a compromise and swift passage to royal assent would be better than a prolonged battle. The news has already provoked a Labour backlash. But we may have to wait for the most significant Labour reaction – which will come from Angela Rayner, the former deputy PM. Rayner was overseeing the bill until she resigned and, in a speech earlier this month, she strongly defended day one protection from unfair dismissal. She said: The last Conservative government shamefully doubled the qualification period against unfair dismissal to two years and stripped workers of protections at the stroke of a pen, and now they are at it again. Government members believe that workers deserve fairness, dignity and respect at work, and they deserve it from day one on the job. Opposition members say that these rights against unfair dismissal will slow down hiring, so let me be clear that employers can absolutely still have probation periods for their new staff; they just will not be able to fire them unfairly at will, for no good reason. Rayner is still seen as a strong candidate to replace Starmer before the next election, and she will have to decide if she wants to use this issue to further her potential leadership ambitions. As our story says, she is planning to take soundings from MPs before speaking in public about her reaction to the U-turn. Here are some of the key develepoments in this story this morning. Peter Kyle, the business secretary, has claimed that the U-turn does not breach Labour’s manifesto. If you read what the manifesto said, it is hard to argue that this decision does not contradict it. But, in a clip for broadcasters last night, Kyle gave it a go. He argued: We also promised in the manifesto that we would bring people together, that this would not be legislation, that this would not be legislations that pits one side against another … The manifesto committed to day one rights. We are committing to day one rights. The manifesto committed us to finding compromise … and we are delivering on that. Sharon Graham, leader of Unite, one of the two biggest unions in Britain and a major donor to Labour, has denounced the U-turn. She said: The employment rights bill is a shell of its former self. With fire and rehire and zero hours contracts not being banned, the Bill is already unrecognisable.These constant row backs will only damage workers’ confidence that the protections promised will be worth the wait. Labour needs to keep its promises. She has been hinting for months that her union could disaffiliate from Labour (which would also lead to it withdrawing financial support), and this U-turn must make that a bit more likely. Some Labour MPs have condemned the U-turn, with one calling it a “sellout”. This is from Andy McDonald, a former shadow cabinet minister. We can all read the manifesto ourselves and, and it says that we’ll deliver day one rights and that includes unfair dismissal. We’re no longer doing it, so we’re doing something completely inconsistent what was in the manifesto. And this is from Justin Madders, who was employment rights minister until he was sacked in the mini-reshuffle following Rayner’s resignation. It might be a compromise It might even be necessary to get the Bill passed asap But it most definitely is a manifesto breach And this is from John McDonnell, shadow chancellor when Jeremy Corbyn was Labour leader. Is this a sellout? Yes it certainly is. If it’s unfair to sack someone, it’s unfair whenever it occurs whether it’s day one or after 6 months. The principle is fairness. Bridget Phillipson, the education secretary, has rejected claims this is a U-turn. She has been doing the interview round this morning, and, in an interview with BBC Breakfast, when it was put to her that this was a U-turn, she replied: I don’t accept that characterisation, I’m afraid. The employment rights bill represents the biggest upgrade to workers’ rights in a generation. We will have a lot more on this as the day goes on. There is not a lot on the agenda, but we are getting a No 10 lobby briefing at 11.30am. If you want to contact me, please post a message below the line when comments are open (normally between 10am and 3pm at the moment), or message me on social media. I can’t read all the messages BTL, but if you put “Andrew” in a message aimed at me, I am more likely to see it because I search for posts containing that word. If you want to flag something up urgently, it is best to use social media. You can reach me on Bluesky at @andrewsparrowgdn.bsky.social. 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