Business secretary faces Commons questions over Tory donor’s proposal for firms to be given right to sack workers at will
Vince Cable is to be forced to answer questions in the House of Commons on the controversial report by a Tory donor that called for companies to be given the right to sack workers at will.
The business secretary, who has described the proposal in private as “bonkers”, will appear in the Commons at 3.30pm on Monday after the shadow business secretary, Chuka Umunna, was granted an urgent question by the Speaker, John Bercow.
Cable will appear amid a belief in Whitehall that David Cameron will abandon his support later this summer for the proposal by Tory donor Adrian Beecroft that employers should be allowed to sack unproductive staff without explanation, known as no-fault dismissal.
A lack of support from business leaders and a furious backlash from Cable, who has warned ministers that the proposal would leave a “dead hand of fear” hanging over employees, is expected to persuade No 10 that the proposal should be quietly dropped later this summer.
Lord Oakeshott of Seagrove Bay, the former Liberal Democrat Treasury spokesman who is an adviser to Cable, described the proposal as the “economics of the madhouse”. He said it would not be implemented.
Oakeshott told Radio 4’s The World at One: “What is completely wrong and really damaging is having a sack-on-the-spot mentality developing in British business. That would be frankly the economics of the madhouse. The problem we have is not enough growth, not enough jobs. Getting people even more frightened for their jobs than they are already would be very damaging for consumer confidence and for demand.
“It would be bonkers – a sack-on-the-spot mentality … All Liberal Democrats are against a sack-on-the-spot mentality and it won’t happen.”
But Tories believe it would be wrong to rule out the no-fault dismissal idea. Damian Collins, the Conservative MP who has edited a report called the Growth Factory, told the World at One: “I think businesses and people out of work would want us to consider any policies that might encourage small businesses to take on more staff … Lord Oakeshott should let some of his colleagues read the report and talk to businesses in their constituencies and see what they think.”
Umunna said on Sunday: “The prime minister and his Tory-led government have run out of excuses for tipping this country into a double-dip recession, so now they are seeking to dump the blame on others for the mess they have created.
“Having sought to blame British businesses for the lack of growth with ministers telling firms to stop ‘whinging’ and to ‘work harder’, now this out-of-touch government wants to blame their hardworking employees for holding back growth with the rights they enjoy in the work place. This is despite the fact that the UK has one of the most flexible labour markets in the western world.”
Downing Street said on Monday that the prime minister was interested in looking at any proposals which would help promote economic growth. But the prime minister’s spokeswoman said that Cameron was not wedded to any one proposal.
The prime minister gave no public indication of a climbdown on Sunday night when he said he was still interested in the Beecroft proposal that employers should be allowed to sack unproductive staff without explanation, known as no fault dismissal.
“On the issue of no-fault dismissal and other proposals like that, I am interested in anything that makes it easier for one person to say to another person: ‘Come and work for me,’ because we need to make our economies flexible,” the prime minister said in Chicago.
“We need to make our labour markets work as flexibly as possible and we will obviously need to examine each proposal on its merits.”