UK Politics

David Cameron and Ed Miliband clash on sackings

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Media captionPMQs: David Cameron says the Beecroft Report on employment rights has some ''excellent ideas'

Prime Minister David Cameron has clashed with Labour leader Ed Miliband over proposals to make it easier for businesses to sack workers.

Venture capitalist Adrian Beecroft said in a report on boosting growth that bosses should be able to fire staff without giving a reason.

At a noisy prime minister's questions, Mr Miliband said the report showed the "nasty party is back".

Mr Cameron accused Mr Miliband of being "in the pocket of the trade unions".

The Beecroft report suggested "some people will be dismissed simply because their employer doesn't like them" but that was a "price worth paying", Mr Miliband told MPs.

He asked Mr Cameron: "Are you really telling us that, with record numbers out of work, sacking people for no good reason is a price worth paying?"

Mr Cameron said unemployment was falling, inflation was coming down and the government had cut the deficit by 25%.

'Supporting business'

He told the Labour leader: "We are taking all of these steps which have led to the greatest number of small business start-ups last year in the country's history.

"Of course, you cannot support any changes to employment regulation because you are in the pocket of the trade unions."

The prime minister said the Beecroft report contained excellent ideas but the government was consulting on the idea of no-fault dismissal only for "micro-businesses".

Mr Beecroft earlier hit back at Business Secretary Vince Cable who had dismissed his proposals to make it easier to fire workers as "nonsense".

The Conservative donor told the Daily Telegraph Mr Cable's objections to his suggestions, published in a report this week, were "ideological not economic" and he accused Mr Cable of being a "socialist" who had done very little to support business.

No 10 said it was doing everything possible to support business.

Downing Street said "some of (Mr Beecroft's recommendations) are being taken forward and some are not".

Asked if the prime minister objected to Mr Cable being described by Mr Beecroft as a socialist, the spokesman said: "I thought Vince Cable was a Liberal Democrat."

The businessman was asked to review employment law by Downing Street after David Cameron called for British industry to be freed from "red tape".

His recommendations were broadly supported by Conservative MPs but Mr Cable said plans for so-called no-fault dismissals were "the wrong approach", and it was not the job of government to "scare the wits" out of people.

'Go nuclear threat'

Speaking to the Telegraph, Mr Beecroft said of Mr Cable: "I think he is a socialist who found a home in the Lib Dems, so he's one of the Left.

"I think people find it very odd that he's in charge of business and yet appears to do very little to support business."

Mr Beecroft blamed the Conservatives' coalition partners, the Lib Dems, for blocking his plans, accusing leader Nick Clegg of always "threatening to go nuclear and dissolve the whole thing if he doesn't get his way with this, that and the other".

He also criticised the Treasury for failing to "drive growth".

Mr Beecroft told the Telegraph that if all of his recommendations were introduced there would be a 5% increase in growth.

He confirmed he backs the delay of new family friendly rules, such as flexible parental leave, although that proposal did not appear in the final version of his report and suggested that key Conservative figures - including former No 10 adviser Steve Hilton - initially backed all his recommendations.

"I'm talking about Steve Hilton, that group and they assured me that David Cameron wanted to do the whole thing. Whether that's right or not I'm not sure but that was the strong impression I got," he told the newspaper.

His report, which was published on Monday, proposed making it easier for firms to sack under-performing staff.

It suggested ending a mandatory 90-day consultation period when a company is considering redundancy programmes and instead called for a standard 30-day period and an emergency five-day period if a firm was in severe distress.

The report said outdated regulations were harming the economy and preventing companies from creating jobs.

Changes to employment law, it has been 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 were no longer needed.

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