Revealed: Ministers dragging feet over key growth recommendations in Beecroft report

Ministers are dragging their feet over more than a dozen key recommendations from a confidential Government report on boosting economic growth in Britain, a leaked Downing Street document obtained by The Daily Telegraph discloses.

Ministers are dragging their feet over more than a dozen key recommendations from a confidential Government report on boosting economic growth in Britain, a leaked Downing Street document obtained by The Daily Telegraph discloses.
David Cameron and George Osborne are currently under intense pressure to draw up policies to help kick-start the economy yet the disclosure that they have rejected advice they commissioned will lead to further questions Credit: Photo: Rex

The report recommends that parents should not be able to take flexible leave from work until Britain’s economy and public finances have recovered in 2017.

It also urges a relaxation of British laws to allow small firms to opt out of seven different employment laws and to reduce the “gold plating” of European directives by the civil service.

The measures would save business hundreds of millions of pounds and allow them to “grow and employ more people” as Britain struggles to recover from a double-dip recession.

David Cameron and George Osborne are currently under intense pressure to draw up policies to help kick-start the economy yet the disclosure that they have rejected advice they commissioned will lead to further questions.

The Government was criticised by business leaders earlier this month after the Queen’s Speech contained a limited number of policies designed to help enterprise.

The Daily Telegraph has obtained a copy of the controversial Beecroft Report, a series of recommendations drawn up for ministers last autumn.

The publication of the report has previously been suppressed amid a behind-the-scenes row between the Conservatives and the Liberal Democrats over the proposals.

However, it can now be disclosed that the Beecroft Report, which was drawn up in conjunction with officials from the Business, Innovation and Skills Department, recommends:

*Delaying laws which will force companies to provide pensions for their workers from this autumn. The report states: “It is unclear why introducing from 2012 a measure that will costs employers £6 billion per year, individuals £7 billion per year and government £2 billion per year is sensible in the current economic climate”.

*A watering down of the so-called “Tupe” rules that mean that a supplier taking over another’s firm’s contract and workers must respect the existing terms of employment for workers. This is a particular issue when private firms take over roles previously conducted by the public sector.

*Allowing firms employing less than 10 people to opt out of seven different employment laws for new workers.

*Scrapping plans for firms to introduce equal pay audits.

*Allowing larger firms to make so-called “collective redundancies where more than 100 workers are dismissed with only 30 days notice. This notice period is currently only available for smaller firms, which means that larger firms have to pay people an extra 60 days worth of wages.

*A new online immigration system which allows employers to check a potential workers’ legal employment status. At the moment, firms have to keep paper records for up to two years after an employee has left. “A modest amount of one-off work by the Home Office…would eliminate any risk of well-meaning employers fearing or facing prosecution for honest mistakes.,” the report warns.

Earlier this month, the Government confirmed that it would push ahead with plans to offer more flexible leave to parents, although the details have yet to be disclosed.

The Beecroft Report concludes that “the benefits to family life may be real, but in the current economic climate do not seem to compensate for the additional costs to employers and, particularly, the Exchequer. The legislation (or at least its implementation) should be delayed until the deficit has been eliminated.”

The report, which was submitted before the economic situation deteriorated even further, adds: “When it is introduced there should be an obligation on employees to give their employer reasonable notice of when they intend to be absent.”

The report also urges ministers not to introduce a right for everybody to be allowed to request a right to flexible working. At the moment, employees with children aged under 17 have the right to request – but not necessarily be granted – flexible working.

“I recommend a non-statutory code of conduct,” the report states. “This will reduce the number of flexible working related employment tribunals and the general feeling among employers that they are weighed down by ever increasing employment legislation.

“If flexible working really is good for employers they will adopt it of their own accord, albeit possibly more slowly than if it is forced on them. For some employers it would clearly create real problems and they should not be forced to carry this cost.”

Adrian Beecroft is a venture capitalist, who was commissioned by the Department for Business and Downing Street to review employment law last year. His 24-page report was delivered to the Government on October 12th 2011.

As The Daily Telegraph disclosed last year, one of Mr Beecroft’s main recommendations was to introduce so-called “compulsory no fault dismissal”. This would allow businesses to dismiss unproductive workers without explanation by simply offering a redundancy payment.

The proposal was rejected by Vince Cable, the Business Secretary, amid fears it would be “very damaging to consumer confidence”. However, a scheme to give more flexibility to small firms employing less than ten firms is being considered.

The Beecroft Report recommends that ministers go even further and allow small businesses to opt out of up to seven different employment laws for new employees.

It states: “The second key issue is the burden that complying with a mass of different regulations places on the owner managers of very small businesses. The time taken in understanding and complying with a multitude of regulations is time that is not spent on growing and developing the business.

“Regulators often ignore the fact that many small businesses are run by people who are very proficient at the activity that is at the heart of their business, be it painting and decorating, cooking, driving or whatever, but have very limited administrative skills. A form that a bureaucrat could complete in a few minutes may take them many times as long.”

The report adds that the competition for competent workers will help keep a check on employers.

It adds: “Potential employees would be told which regulations the employer had opted out of and would be free not to take the job if they did not wish to. If employers found that they could not recruit because they had opted out of certain regulations then they would generally choose to opt in to them.”

Last week, the Government published its Enterprise and Regulatory Reform bill. The legislation takes forward some recommendations from the Beecroft report such as simplifying the system of tribunals and increasing fees for those taking unfair dismissal cases. The reforms are privately referred to as “Beecroft-lite” by ministers.

The Government is thought to be preparing to publish the Beecroft report after receiving a series of Freedom of Information requests.