Sir Keir Starmer’s package of employment reforms faces a crunch moment in the House of Lords on Wednesday as Tory peers fight against Labour’s plan for limitless compensation in unfair dismissal cases.
The flagship legislation has been dogged by parliamentary delays and — even though it may soon creep towards Royal Assent — will involve 26 separate consultations before the package can be implemented in full.
As such the reforms are a vivid symbol of how Starmer’s “change” and “national renewal” manifesto is taking longer than many Labour MPs expected.
Starmer has promised tougher borders, more green energy, a surge in housebuilding and shorter NHS waiting lists. Yet Labour MPs and voters are learning that transforming Britain takes time — a commodity that, some fear, is rapidly running out for the ruling party.
Ministers recently abandoned a manifesto promise to give workers dismissal protections from the first day in a job — six months will be the new limit — to try to rescue the employment rights bill from its Lords logjam.
However they also agreed that highly paid workers who win unfair dismissal claims could in future receive unlimited amounts in compensation rather than the current £118,000 limit.
The Liberal Democrats were on Tuesday night considering joining forces with the Tories to overturn that provision, with the prospect of fresh delays.
It has become a common refrain in Westminster that Starmer and his cabinet need to “show results” with the public to reverse Labour’s plunging opinion polls.
Sir Michael Barber, who led the delivery unit under Tony Blair’s leadership and is an unpaid adviser to the Starmer government, has said that the second year of any administration must be a phase of “relentless implementation” to ensure results start to flow before the following election.
Barber’s theory is that ministers take a year to work out how government works and that by year three, it is too late. But people working at the heart of Starmer’s administration sense a lack of urgency in some departments, in the face of the threat of a Reform UK government, which the prime minister said would leave him unable to sleep at night.
Some of Starmer’s targets are long-term structural overhauls that could never be delivered overnight. They include building 1.5mn new homes over the current parliament and producing most of Britain’s electricity from low-carbon sources by 2030. A new “Great British Railways” will not be complete until 2027 because it involves taking over train lines as the current private franchises end.
Aides also blame the blocking tendencies of the House of Lords, where Labour only has a quarter of the seats and has lost numerous votes.
The prime minister has done little to address the imbalance, although he will create a new batch of peers next month.
Yet in Whitehall it is a common refrain that ministers arrived with too little focus on delivery.
One senior Whitehall official said that while some ministers were starting to deliver — for example energy secretary Ed Miliband, who is approving a slew of wind and solar farms, and home secretary Shabana Mahmood, who is radically changing asylum and immigration rules — others were too slow.
“We just weren’t prepared,” said one veteran of the new Labour era. “One permanent secretary said to me he couldn’t believe how little plan we came in with compared to 1997.”
One Labour insider said it had taken ministers and special advisers a long time to get “up to speed”: “Labour was out of power for a long time, getting the government levers to work was a task in itself.”
Some argue the problem goes deeper, saying Starmer’s well-known distaste for politics has left his government without a clear philosophy to guide the painful decisions it has to make.
“A clear political economy — knowing who you’re putting first, taking on and what trade-offs are acceptable — is what enables delivery. It empowers people throughout the system to confidently make decisions . . . rather than getting stuck or defaulting to the safest option,” said Mark McVitie, director of the Labour Growth Group.
One former aide to Starmer said there were “issues with the political leadership”, adding: “The constant reinvention of what the direction is means sometimes things feel like two steps forward, one step back.”
Starmer, who entered No 10 promising a new era of respect for the civil service, has quickly shown frustration with what he described as a “cottage industry of checkers and blockers” across the state preventing action.
Hannah Keenan of the Institute for Government said this frustration had not been accompanied by a clear and consistent plan for the state to do things differently, and a promise of “mission-driven government” had largely faded from view.
“I don’t think the government has put enough definition around what it meant by missions to really get the system to move behind it — which many civil servants would want to do. There hasn’t been that sustained focus and plan,” she said.
So-called “mission boards” were set up with much fanfare to break down traditional departmental silos, only to wither rapidly when it became clear that the prime minister would not chair them himself.
As the prime example of this lack of clarity over the reform of government, some observers point to the appointment of Sir Chris Wormald, a Whitehall lifer steeped in civil service tradition, as the cabinet secretary charged with a “rewiring of the British state”.
Meanwhile the Institute for Government’s progress tracker shows little improvement on most of the main public services since Labour took office.
On the NHS, while ministers talk of cutting waiting lists, a fall of 230,000 to 7.4 million is widely seen as too slow to hit the government target of 92 per cent of patients treated within 18 weeks by the end of the parliament.
Ministers understandably point to the array of problems they inherited from the Conservatives. While acknowledging this, Ben Zaranko of the Institute for Fiscal Studies said the government had struggled to prioritise within the funds available with only a “patchy reform agenda” to improve results.
“There was a fairly sizeable initial cash injection but a lot of that went on things like public sector pay agreements, which don’t seem to have brought much in return, asylum costs and support for Ukraine, which don’t bring immediate frontline improvement,” he said.
Harry Quilter-Pinner, executive director of the IPPR think-tank, said the government faced challenges including “blockages in the system” and a civil service worn down by years of austerity and Brexit.
“This puts the burden on the government to be more insurgent . . . and to be ruthless in driving this through the system at pace,” he said. “If mainstream parties can’t get the system to deliver . . . they will turn to parties that offer to rip it up instead.”
John McTernan, a former Downing Street adviser, likes to remind MPs about Lord Hailsham’s lecture on Britain’s “elective dictatorship” from the 1970s.
“He argued that the UK government is the least constrained democratically elected government in the global north, it can do what it wants. Especially if you have a huge majority in the House of Commons, you’re the commander-in-chief, you have Henry VIII powers . . . and statutory instruments that can be rammed through,” he said.
“The state can’t stop you, the electorate can’t stop you, so who is stopping you? Have a look in the mirror — it’s the face you see in the mirror.”