Pernicious New Labour legislation is distorting the jobs market and costing business, says Joe Dinnage

It’s a golden rule of good writing to invoke George Orwell as little as possible. Chronically overused, the term ‘Orwellian’ is to newspaper columnists what ‘obviously’ is to football pundits. 

Occasionally, however, rules must be broken.

We at the Prosperity Institute have today published a scathing indictment of the Equality Act, evidencing how the legislation has established a truly Orwellian environment in our workplaces, where some animals are more equal than others.

Some background. Like so many of the long-standing problems plaguing Britain, the Act was the brainchild of New Labour and brought into effect under the Conservatives. Granted royal assent in 2010, the measure was billed as a simple condensation of previous anti-discrimination legislation – spanning statute as old as the Race Relations Act 1965 to law as recent as the Disability Discrimination Act 1995.

The road to hell is paved with good intentions. Rather than simplifying our legislative landscape, the Equality Act has complicated our understanding of the law, undermining traditional legal principles; wreaking havoc in the workplace; distorting the free market; and perhaps most disturbingly, fostering a culture of justified discrimination across the public sector.

Few case studies exemplify the absurdity of this settlement as well as the Next case, in which the Equality Act was used to put the retailer on the hook for millions over spurious equal pay claims.

Discrimination?

In the case of Thandi and Others v Next Retail Ltd and Next Distribution Ltd, 3,540 employees working as retail consultants brought an equal pay sex discrimination claim against the firm in relation to four warehouse workers being on higher wages. It will come as little shock that the retail consultants (working on the shop floor) are overwhelmingly female, whereas those in the warehouse tend to be male. 

Under the terms of the Equality Act, ‘equal work’ is defined as work of equal value, which as this case demonstrates, can be decided by a judge in the vaguest terms. There are ongoing appeals in the case, so a final settlement has not been reached, but a £30m payout by Next has been mooted publicly.

It does not take an expert in labour market economics to discern that warehouse and retail work are entirely different vocations, that happen to – generally – be staffed by people of opposing sexes. Imagine you were a groundsman for a successful women’s football club. Though it would be nice to earn the same as the players, it would clearly be risible to argue for pay parity on the grounds that, as both jobs require the use of your legs, your wage is being suppressed by a discriminatory superstructure.

Joking aside, Next is not the only institution to have been hoisted by this. A similar equal pay claim practically bankrupted Birmingham City Council in 2023. In this instance, primarily male road workers and rubbish collectors were paid bonuses not made available to predominantly female cooks, cleaners and care staff. The judgement was estimated to have cost the Council between £250m and £750m.

Returning to Orwell, he is quoted as having said “if liberty means anything at all, it means the right to tell people what they do not want to hear”. It’s time the government started hearing the demands for change from the many businesses hamstrung by punitive tax hikes, job-killing employment rights legislation, and those parts of the Equality Act that hand the power to set wages from firms to judges. 

Labour have talked a good game about their commitment to kickstarting economic growth and boosting our productivity. By either repealing or fundamentally reforming this pernicious legislation, they could give our businesses the freedom to do just that.

Joseph Dinnage is senior press officer at the Prosperity Institute