Would the Beecroft proposals really help the UK economy?

By • May 23rd, 2012 • Category: Legal News, News

Unless you have been living under a rock, anyone involved in the UK employment law sector will be aware of the Beecroft Report, prepared by venture capitalist and Tory Donor Adrian Beecroft, the purpose of the report being to reduce red tape and help with UK business growth.

Overall the report contains some interesting ideas, including the suggestion that TUPE protection of terms and conditions should only last for a year after transfer, the concept of “compensated no-fault dismissal” agreements, and a proposed cap on compensation for loss of earnings in discrimination cases.

But will any of this really help the flagging UK economy and encourage business growth, in the midst of one of the longest and deepest recessions we are ever likely to witness?

The report has plenty of ideas and has caused a great deal of headline-grabbing controversy, but is arguably short on data and evidence that these proposals will make a tangible difference.

The UK already has one of the lowest levels of employment regulation in the developed world, so it is hard to see how making it even simpler will boost the economy in any radical way.

There are a lot of countries which have much higher and more complex employment law regulation than the UK which actually have better employment rates, higher growth and are ultimately more competitive – so maybe simpler is not necessarily better?

Indeed, the OECD itself believes “There appears to be little or no association between employment protection legislation strictness and overall employment.”

Although the report was written by venture capitalist, even the most right-wing of MPs, including Conservative MP John Redwood, are not convinced that these proposals will make any difference. Mr Redwood said in parliament yesterday, “…it [the Beecroft Report] is unlikely to be the game changer that tips us into fast growth on its’ own.”

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