If you are not familiar with Adrian Beecroft, the former venture capitalist, here is the upsum: the Tory donor was commissioned not long ago to compile a report into how employment law could be shaken up. He was called in by Steve Hilton (pictured), the head of policy in No 10, who wants to slash red tape as part of the autumn growth review.
As yet the report has not been published but its main proposal has been leaked to the sympathetic Daily Telegraph: that companies should be allowed to fire at will. Instead of going through complex unfair dismissal procedures they could simply get rid of staff and offer a pay-off. He admits that this would lead to some managers sacking people simply because they did not like them: “While this is sad I believe it is a price worth paying for all the benefits that would result from the change“, he says in the report.
The proposal has the backing of many business groups including the British Chambers of Commerce and the Institute of Directors.
But opposition within Whitehall has been led by Vince Cable and Nick Clegg, who believe the report’s recommendations go far too far. Their most convincing argument is that there would be an immediate impact on consumer spending if people suddenly lost their job security and feared they could be sacked at any time.
Critics of Beecroft believe he has a knee-jerk right-wing attitude. Apparently the first draft included a recommendation that women on maternity leave should give six weeks’ notice to employers as to their return date. In reality the law already says women have to give eight weeks notice. “That shows how prejudiced he is and how the report isn’t always fact-based“, says one critic.
We revealed on Monday that Jeremy Heywood, the permanent secretary in Downing St, had stepped in with a compromise proposal – which would keep the fire-at-will initiative but only for small companies.
Meanwhile the row has deepened after “senior figures in Downing Street“- understood to be Hilton’s allies – expressed annoyance that George Osborne has not swung his weight behind them.
As James Chapman reports on his blog:
Mr Osborne’s allies, for their part, dismiss the idea that he is holding the whole thing up as ‘total nonsense’ and say that only one faction in Number Ten, led by Mr Hilton, is pushing for the entire Beecroft package to be implemented. ‘No-one ever said it would be adopted wholesale,’ says one of the Chancellor’s friends.
Meanwhile the FT reports today that David Cameron believes the briefing and counter-briefing is “damaging”. Osborne and Cameron both worry that they risk “retoxifying” the Tory brand if they remove basic workers’ rights, reports George Parker.
But those backing the proposals will keep on fighting because they believe they are key to improving Britain’s competitiveness: “If we haven’t sorted out employment law by the time of the growth review, we might as well pack up and go home,” says one.