Beecroft report

Most media interviews I have dealt with over last two days have focussed on the Beecroft Report. This is the report, commissioned by David Cameron, by venture capitalist Adrian Beecroft proposing that employment regulations are blocking Britain’s economic growth.
 

You have to start by wondering why Beecroft was commissioned to write this report in the first place. As an asset stripping venture capitalist he knows plenty about wrecking jobs, but no obvious qualifications in creating or maintaining them. Of course he is a major Tory donor and the man behind Wonga loans, who have just been warned by the OFT over threatening debt collecting tactics. No doubt the next ‘red tape’ he will be recommending that the government get rid of.

 

The report itself appears to have gone through some political revisions. The draft version published by the Telegraph has some significant variations from the version hurriedly published by the government last night. Three proposals were removed after being submitted to No10 before it was sent to the Business Department. They called for the Government to delay plans to introduce flexible working for parents, to abandon proposals to allow all workers to request flexible working, and to remove regulations surrounding the employment of children. Clearly even David Cameron thought forcing children up chimneys again was a step too far!

 

Then the report had some difficulty within the ConDem coalition. Vince Cable described it in short as “bonkers”. The longer version was, “Businesses are much more concerned about access to finance or weak demand than they are about this issue.” Nick Clegg took a similar line with "I don't support them and I never have. I've not seen any evidence that creating industrial-scale insecurity amongst millions of workers is a way of securing new jobs.”

 

So much for the politics, how would the plan for compensated no fault dismissals impact on the workplace? Essentially employers will end up paying more directly in terms of workers taking more complex (uncapped compensation) discrimination claims which carry a higher potential legal and reputational risk and indirectly through the continued acceptance of inefficient management practices.

The CIPD's Katerina Rüdiger puts it clearly, “Headline grabbing proposals which call for making it easier to 'sack the slackers' are at risk of masking the real question we should be asking: why are so many UK workers still underperforming? The reason is not stringent employment legislation - indeed the UK has one of the most de-regulated labour markets across OECD countries - but a crisis of management and leadership skills.”

The Channel 4 fact check gives a good summary of the evidence, something completely missing from the Beecroft report. They conclude the reports main assertion, “just doesn’t stack up, according to those who have researched the matter.”

Only bad ineffective employers believe in hiring and firing at will. Even the government’s own survey shows that only 6% of employers regard employment rights as a barrier to growth. We have some of the weakest employment laws in Europe and these proposals will do nothing to encourage confidence and growth. David Cameron should spend more time talking to those who understand the world of work, and less to his dinner party chums.