Labour says it will stick with workers’ rights plans despite Mandelson remarks

Party says it is committed to policies such as zero-hours ban after peer warned against ‘rushing’ changes

Labour has said it will keep its ban on zero-hours jobs and improvements to workers’ rights after the party peer Peter Mandelson warned against “rushing” through changes championed by trade unions.

Anneliese Dodds, the Labour chair, said the party was committed to the package to “make work pay” and get more money into people’s pockets, but that it would “continue to discuss” the plans with business and unions.

Keir Starmer’s new deal for working people would give employees more rights such as protections against unfair dismissal, sick pay and parental leave from day one but many business groups are lobbying to water it down.

Lord Mandelson, a former business secretary who now chairs a global consultancy advising businesses, wrote in the Sunday Times this weekend that the changes must not be rushed or go further than “the settlement bequeathed by New Labour”.

The Guardian previously reported that Mandelson gave a combative speech to a City of London Corporation dinner at party conference, where he warned against making labour market reforms that could swing too far towards the “other extreme”.

Rachel Reeves, the shadow chancellor, said in her Mais lecture this week that the party would “work with business as we deliver and implement these policies”, raising the prospect of further refinement of the package.

Speaking on Sunday, Dodds said the package of workers’ rights was essential to growth. However, she also acknowledged there would be further discussions with businesses and unions.

She told BBC One’s Sunday with Laura Kuenssberg: “We can’t walk away from the need to make work pay. We really need to be boosting productivity and getting more money into people’s pockets and we need to ensure we’ve got far better conditions for innovation. If we don’t have that new deal for working people to make work pay, we are just not going to be delivering on those areas.

“Now Labour is a pro-business and pro-worker party, both need to go together. That’s what we set out in that new deal for working people. We are going to continue to discuss that with business, with unions and with working people as you would expect. And we need to make sure living standards and economic growth are on a far stronger footing than they have been over the last 14 years.” The business lobby group CBI has made clear it is pushing Labour to soften proposed laws on workers’ rights.

Rupert Soames, the new president of the CBI, told the FT last month that the UK needed to avoid a “European model” of employment rights and resist excessive regulation that undermined productivity in order to rediscover its competitiveness. He said the CBI was providing “private feedback” to Labour on its policy plans.

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Mandelson’s latest intervention is more policy-focused than his other recent advice, when he counselled Keir Starmer to “shed a few pounds” this month. He said clothes and appearance were “not unimportant” in politics, noting on the Times Radio podcast How to Win an Election that “Starmer needs to shed a few pounds and that would be an improvement”.

In response, Wes Streeting, the shadow health secretary, told LBC: “As the shadow health secretary I’m against that kind of fat shaming, Peter Mandelson should know better. Let me tell you we have seen the odd paunch from [Peter] over the years so in glass houses people shouldn’t throw stones.”