Vince Cable calls sacking plans in Beecroft report 'the wrong approach'


Speaking in May this year Vince Cable criticised proposals to make it easier for firms to fire staff

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Business Secretary Vince Cable has condemned proposals to make it easier for firms to sack under-performing staff as "the wrong approach".

A report commissioned by the prime minister is also expected to call for shorter periods of consultation over compulsory redundancies.

But Mr Cable told the BBC it was not the job of government to "scare the wits" out of people.

Many Tory MPs back the plans as a means to boost the UK's businesses.

The economy re-entered recession in the first quarter of this year and the coalition government is looking for ways to encourage growth.

The report, which was published on Monday, was compiled by Conservative-supporting venture capitalist Adrian Beecroft.

Its proposals include:

  • An end to a mandatory 90-day consultation period when a company is considering redundancy programmes. Instead it will suggest a standard 30-day period and an emergency five-day period if a firm is in severe distress
  • A cap on loss-of-earnings compensation for employees who make successful discriminatory dismissal claims
  • Reform of the rights that workers are allowed to "carry" to new employers when their companies are the subject of a takeover
  • Scrapping provisions in the Equality Act which make employers liable for claims from employees for "third-party harassment", such as customers making "sexist" comments to staff in a restaurant
  • Shifting responsibility for checking foreign workers' eligibility to work in the UK from employers to the Border Agency or the Home Office

The study follows David Cameron's call for British industry to be freed from "red tape".

Changes to employment law, it is argued, would improve the supply of suitable staff to firms, who would be less afraid of having to make large payouts or face legal action when laying off those who are no longer needed.

The theory is that firms would hire more staff and the change would make the UK a more attractive place to start and grow a business.

The plans, which have not been accepted by the prime minister, have been portrayed as a source of tension between Conservatives and Liberal Democrats.

The Beecroft Report had been due to be published later in the week, but this was brought forward after leaks of what the government called an out-of-date version.

Business minister Mark Prisk told the Commons that action was already being taken on 17 of the 23 Beecroft recommendations.

Mr Cable told the BBC: "Most of it is pretty uncontroversial, but there's one bit which is this so-called 'no-fault dismissal', which some people describe as a hire-and-fire system.

"I don't see the role for that. Britain has already got a very flexible, cooperative labour force. We don't need to scare the wits out of workers with threats to dismiss them. It's completely the wrong approach."

But Mr Cable's department has issued a call for evidence to see whether firms with fewer than 10 employees would favour the no-fault dismissal rule.

When asked whether there was a difference of view between himself and Downing street, he said: "I think we're all on the same page."

'Right direction'

Mr Cable has reportedly spoken several times via telephone to Labour leader Ed Miliband since the coalition came to power.

Mr Miliband refused to be drawn on the claims, adding that he had conversed with "lots of people lots of times".

However, his comments on the Beecroft proposals echoed those of the business secretary: "We need an economy based on long-termism, investment and training. We need to get away from an economy based on a short-term, take-what-you-can, fire-at-will culture."

But Conservative MP Damian Collins said: "It would be terrible if smaller businesses were holding back on recruiting because they're worried about whether they can sustain the income they need to keep those people on over the longer period of time."

The prime minister's spokeswoman said the government wanted to "support business, encourage growth, while at the same time ensuring that employees rights to work were not weakened".

She added: "The PM is not wedded to one set of proposals or another, but he does believe he should look at what can make the process (on employment) easier."

Adam Marshall, director of policy at the British Chambers of Commerce, said: "Of course employment rights are important, but should be weighed against opportunities for the unemployed who are looking for work."


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  • rate this

    Comment number 1356.

    The lack of joined up thinking defies belief, to get the economy moving people need to feel confident enough to spend lets remove job security, everyone will be out in the shops straight away.

    This is just the sort of greed and selfishness that got us here in the first place, aren't capitalists brilliant.

  • rate this

    Comment number 1355.

    @Mark_from_Manchester: Is it with the general workforce being less competent than teachers?

    You've pretty much got to have an ideological passion for teaching to become a teacher (and I say that as someone who considered it but realised I'm not up to it). Such people tend to demonstrate the most dedication of any worker.

  • rate this

    Comment number 1354.

    We hear a lot about the investment of the employer but what of the investment of the workers? They put the future of their home and family on the line when they take a job on. This is particuarly the case where someone moves from one employer to another. The existing laws ensure that they are not unfairly thrown out of their jobs. These rights must be protected by the unions and opposition.

  • rate this

    Comment number 1353.

    Firms don't need any more powers to sack under performing staff but the government does.

    Only 17 teachers struck off for incompetence in 10 years out of a total of 438,000 teachers shows where the problem really is.

  • rate this

    Comment number 1352.

    "If we think of Mr Beecroft as a 'troll', we may achieve a more relaxed perspective"

    That's a very good idea, unfortunately this particular 'troll' has the attention and interest of the 'Tory MP Trolls' who are also totally dis-connected from the real world which us poor b***ers have to live and work in. If you have the time and enthusiasm Beecroft's report is on-line.

  • rate this

    Comment number 1351.

    @Countryman1: in what way do you want to abuse your future employees but cannot under current employment law?

    @1344.Fog: They certainly can, their best bet being s.2(3). Perhaps you misread "precipitate" as "force". Or they could vote, by usual simple majority, for a repeal of the Act in order to remove the 14 day waiting period. Parliament cannot bind itself.

  • rate this

    Comment number 1350.

    Will Mr Cameron show us the way with the proposed changes to employment law by sacking Mr Hunt?

  • rate this

    Comment number 1349.


    In a very short time from now I reckon the 'experts' will be telling us all that they knew the Thatcher inspired disaster we've all just endured was going to fail.

    The Tories won't survive their next defeat.

  • rate this

    Comment number 1348.

    Comfortably Numb

    I would hope so, indeed DID hope so when i first started posting on here, but all i've noticed is the same people on both sides of the party spectrum constanty show ignorance of fact.

    I do hope more people look into things based on what some of us say, i just wish there was somewhere else to go for a real discussion though. Something currently lacking.

  • rate this

    Comment number 1347.

    Bosses are horrible these day's. They put extra work on you because they don't want to employ anyone else. You work your Gutts off doing TWO peoples work. If you can't cope they sack you.

  • rate this

    Comment number 1346.

    On of the principle reason that we have not expanded and recruited employees is the current employment laws.
    If you're profitable, it;'s reasonable to infer that you're competent.What,specifically, are you afraid of and why?

  • rate this

    Comment number 1345.

    What is the point of employment law? No companies in the uk respect it. REC's members violate it on a daily basis. No one wants to speak out about unfair treatment at work HR is often on the side of the management, & being a union member makes you a no go area for some employers especially when an unfair decision is made (e.g sacking) & now this? No wonder so many are on the dole permanently.

  • rate this

    Comment number 1344.

    1311. mactheredone

    Why don't the pro-Cable Lib Dem MPs precipitate a general election?
    Because they are hypocrites and incompetent politicians.
    No, it is because they can't under the Fixed Term Parliaments Act 2011.

    The lack of knowledge by the average poster on here just goes to show why the UK gets the government it deserves.

  • rate this

    Comment number 1343.

    1321. Rodders

    I disagree - visitors to this blog will absorb information and decide for themselves.

    You... me... and others on this blog are expressing opinions that may just have currency with a wider audience. Many will disagree, and we'll debate.

    That is what this internet of ours is all about.

    And not before time...

  • rate this

    Comment number 1342.

    I was lucky in the late 70's to get a job placement with a large US profitable corporations UK operations. During the mid 80's the UK directors started regular intakes of graduates who were fast tracked into management. Our line managers then changed every 3 months. The management and their perks grew and grew. In 1992 we lost our jobs and the management bought out the company.

  • rate this

    Comment number 1341.

    We run a small and profitable business. On of the principle reason that we have not expanded and recruited employees is the current employment laws. These proposals are definitely a step in the right direction and will boost employment and the economy.

  • rate this

    Comment number 1340.

    Of course the useful thing is that if people are sacked, the government doesn't have to pay them benefits either, at least not for up to 6 months, by which time if they haven't already been forced into lower paid work they can be forced to work for their benefits. That's really going to give people the confidence to go out and spend isn't it, and the banks confidence to lend to them?

  • rate this

    Comment number 1339.

    "The report, which was published on Monday, was compiled by Conservative-supporting venture capitalist Adrian Beecroft."

    If we think of Mr Beecroft as a 'troll', we may achieve a more relaxed perspective.

  • rate this

    Comment number 1338.

    @exstory: Well, think of the possibilities! You could hire someone at minimum wage and tell them you'll fire them if they don't sleep with you. Oh, and they have to abort if they get pregnant.

    If they're fired or quit, no Jobseekers' Allowance for them.

    "No fault", just slavery.

    @1331: '70s inconvenienced the middle class; '80s ruined everyone else. Journalists represent the former.

  • rate this

    Comment number 1337.

    1284. Moira
    I have managed underperformers. Not a great thing to do but 80% of them turned out to be pretty good
    Moira, you could be just what we've been looking for.........we could write Pickles off straight away if that makes it easier?

    Say you'll do it please.....pretty please....I'll do anything.....well, anything apart from spend a night down the pub with Michael Gove.


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