DAVID CAMERON is to back a radical plan to rip up employment red tape to help deliver growth.
He will throw his weight behind a far-reaching report which calls for a bonfire of regulations that employers say are stifling job creation.
The report by Adrian Beecroft, a venture capitalist, will be published in full this week after months of delay.
The Sunday Telegraph has learnt that it will call for firms to be given much greater flexibility to make redundancies; for the lifting of restrictions on the equality laws that industry says are stifling job creation, and for a cap on employment tribunal payouts.
Mr Cameron will risk severe tensions with the Liberal Democrats by backing such far-reaching proposals but will use his support to attempt to reassure business that the Government is “pro-growth”, after a bruising reaction to the Queen’s Speech.
The Sunday Telegraph has learnt that the 15-page document, drawn up by Mr Beecroft after he was given access to Government lawyers, has 20 proposals including: AN end to a mandatory 90day consultation period when a company is considering redundancy programmes. Mr Beecroft recommends a 30day period and an emergency five-day period if a company is in severe economic distress. A cap on loss of earnings compensation for employees who make successful unfair dismissal claims. Payments can often total hundreds of thousands of pounds. Major reform of the rights that workers are allowed to “carry” to new employers when they are the subject of a takeover. Currently, the rights, called transfer of undertakings (TUPE), can leave people in the same company working in the same job with different levels of rights for many years. An end to provisions in the Equality Act which make employers liable for claims from employees for “third party harassment” — for example, customers making “sexist” comments to staff in a restaurant. The Government has already begun a consultation on the issue. Moving the responsibility to check on foreign workers’ eligibility to work in Britain from employers to the Border Agency or the Home Office.
Whitehall sources said the Prime Minister and the Chancellor believe the publication of the report will show that the Government is serious about kick-starting the economy, which has seen two quarters of negative growth, officially putting the UK in recession. A Whitehall source who has seen the report said: “It is aimed at getting rid of blocks to hiring people and the sense of entitlement for those who are already in employment.
“What about those who want to get into employment? They need the chance. It is about reform to drive growth, it is much too hard for companies to restructure and get the right people that they see as fit to do the job.”
Yesterday Mr Cameron spoke of the urgent need for growth as he met the leaders of the world’s most powerful economies at the G8 summit in the United States. He delivered a blunt warning directly to other European leaders about the need to resolve the mounting eurozone crisis.
At the summit in Camp David, the US presidential retreat, he said Europe’s leaders should act “very fast” to resolve the crisis. The Prime Minister urged eurozone leaders to put in place “strong contingency plans” for a possible break-up of the single currency.
The fate of Greece, which is widely expected to crash out of the euro in the near future, was high on the G8 agenda.
Last night, in their postsummit communiqué, the G8 leaders said they wanted Greece to remain within the single currency but acknowledged that “the right measures are not the same for each of us”.
Mr Beecroft, a Conservative Party donor, caused controversy when parts of his report for the Prime Minister on making it easier for employers to sack underperforming staff were leaked last autumn.
Many Liberal Democrats made clear their opposition, with Vince Cable, the Business Secretary, particularly concerned by the recommendations, which is why the report has languished unpublished since then.
Although the first Bill outlined in the Queen’s Speech was legislation to overhaul employment regulation, it stopped far short of promising moves to implement Beecroft.
The only concrete detail disclosed of the report was that it would encourage employers and employees to go through conciliation rather than legal tribunals.
Critics pointed out that the legislative programme would lead to the creation of several new quangos, undermining previous efforts to cut the number of such bodies.
In a major speech last week, the Prime Minister said that although he would not deviate from plans to bring Britain’s deficit under control, he recognised the need for growth policies.
Some business leaders, such as Justin King, the CEO of Sainsbury’s, have criticised the lack of pro-growth measures in the Queen’s Speech earlier this month.
Last week, William Hague, the Foreign Secretary, issued a stinging riposte in a Sunday Telegraph interview, telling business critics to stop “complaining” and saying: “There’s only one growth strategy: work hard.”
This week, a group of backbench Conservative MPS will keep up the pressure on the Government with their report “The Growth Factory”.
Edited by Damian Collins, with contributions from fellow MPS Kwasi Kwarteng, Sam Gyimah and Jo Johnson, it will call for new policies to support growth, such as an extra runway in the south-east of England; a push for more engineering graduates and the promotion of start-up loans for businesses.
“With high levels of unemployment in Europe in particular, people require more of their leaders and to see evidence that they are straining every sinew to help create competitive advantage in their economies,” Mr Collins says in the report which will be published by TLGLAB, a new business think tank.
At the G8 summit, President Barack Obama said all the G8 countries were “absolutely committed” to growth, stability and fiscal consolidation.
Angela Merkel, the German chancellor, is coming under pressure from the United States and François Hollande, the new president of France, to soften her commitment to austerity in favour of growth.
In an interview with The Sunday Telegraph this weekend, Ed Miliband, the Labour leader, urges Europe’s leaders to develop a continent wide growth strategy rather than each pursuing austerity within their own country.