Spain’s leftwing deputy prime minister, Yolanda Díaz Pérez, has a message for Labour politicians as the UK government’s employment rights bill takes its next step to becoming law this week: take heart from our success.
With business groups in the UK issuing dire warnings about the impact of the workers’ rights package, Díaz, the minister of labour and social economy, remembers her own government’s battle when it thrashed out radical labour laws that came into force in 2022. “We went through nine months of hell, literally. We had the press against it, academia, research centres – everybody was saying this was going to contribute to unemployment and not eradicate it,” she recalls.
Instead, the legislation reduced Spanish companies’ use of temporary contracts significantly, without causing unemployment to jump – despite the fact that the minimum wage was increasing sharply over the same period.
“In just six months the impact was immediately positive,” Díaz says, speaking by video link from her Madrid office. “The message that I send to your government, to the unions, to [businesses], is that it is worth doing things differently.”
Spain’s unemployment rate has declined, from 14% at the start of 2022 to 11% at the end of last year (though it is still more than twice the level in the UK). The government has also made a positive argument for migration, by contrast with Labour in the UK, which has lambasted the Conservatives for running an “open border experiment”.
The International Monetary Fund (IMF) said in its annual assessment of Spain’s economy for 2024 that “the labour market performance has been exceptionally strong”.
In the UK, Labour’s workers’ rights package – much of which was negotiated with the party’s union backers in opposition – includes a right to a contract with regular hours, a ban on “fire and rehire”, and protection against unfair dismissal from day one of employment.
Like the Spanish reforms, it also strengthens the negotiating power of trade unions, making it easier for them to gain recognition in workplaces, for example.
Labour tabled amendments to the legislation last week, but these broadly strengthened the measures, rather than watering them down, despite intense lobbying from business groups.
Díaz says she has discussed workers’ rights with the UK work and pensions secretary, Liz Kendall, and urged Labour to press ahead – particularly in the face of the threat from the far right, which is being felt across many European countries.
“We need it more than ever. The extreme right is fighting trade unionism and trade negotiation power precisely because it knows how important it is,” she says. She has also discussed the reforms with the TUC’s general secretary, Paul Nowak.
Little more than a decade after being forced to accept a bailout during the eurozone debt crisis, Spain’s economy is looking perky, with GDP growth for 2024 of 3.2% the strongest in the eurozone – though, like all European countries, it is braced for the blowback from Donald Trump’s tariffs.
Díaz sees her government’s approach as a deliberate riposte to decades of labour market deregulation in Spain, similar to many other advanced economies, including the UK. “Neoliberalism, as an intellectual and political proposal, claimed that deregulating, cutting off labour rights, attacking unions and lowering wages, we were going to have more jobs. And this is what, empirically, is not true, [as] we have demonstrated in our country,” she says.
She argues that boosting workers’ rights, and their living standards, has been positive for growth and productivity – and that raising living standards is the key to combating the growing threat from the far right. “I believe that we have to go on the offensive with a clearly differentiated model,” she says. “We have to give hope to working people, who are the majority of society.”
As well as reducing widespread use of temporary contracts, which she describes as a “use and throw” approach to workers, the reforms introduced taxpayer support to safeguard jobs at firms hit by short-term crises. Carmaker Ford used this Erte (temporary employment regulation filing) at its Valencia plant, after last year’s devastating floods.
Díaz, 53, stepped down as leader of her Sumar party last year, after winning less than 5% of the vote in EU elections, but retained her role as second deputy prime minister in Pedro Sánchez’s coalition.
Sumar holds 31 of the 250 seats in Spain’s congress of deputies. Sánchez, who leads the socialist PSOE party, has governed since 2018, in a succession of coalitions with other leftwing parties.
She was previously a member of parliament in the northern Spanish region of Galicia, where she had her own law practice.
She is now spearheading the next, even more radical phase of Spain’s workers’ rights push – including a cut to the standard working week from 40 hours to 37.5 with no loss of pay, and a new “right to digital disconnection” outside working hours.
“The debate is the same that we have had with the minimum wage and with the labour reform. That is … it will generate unemployment, which is not true. I’m sure it’s not going to be true,” she says.
With Europe preparing to ramp up defence spending to adapt to the dramatic shattering of the postwar transatlantic alliance, Díazinsists this must not come at the expense of social spending.
In the UK, the chancellor, Rachel Reeves, is contemplating cuts to the welfare bill to help meet her self-imposed fiscal rules – and the increase in defence spending to 2.5% already announced will be funded by cutting the aid budget.
“We’ve got to be very clear here: we cannot oppose social investment … with the cost in defence,” she says. “We need more social budgets than ever, more social rights, more social welfare, more public housing policy, more – and better – employment. The other approach is to fall into the dialogue of the far right, and there the far right wins.”
CV
Age 53
Family Mother of a teenager.
Education Law graduate.
Last holiday Baiona in Galicia.
Pay €87,500 in 2024.
Best advice she’s been given “Be
a good person.”
Biggest regret “Regret is only useful if you learn something
from it.”
Phrase she overuses “The faintest ink is better than the clearest memory.”
How she relaxes Listening to music.
