Business secretary reasserts control over department and lifts veil on dispute with Theresa May over immigration ‘red tape’
Vince Cable reasserted his control over the business department on Sunday as he dismissed rightwing claims that further business deregulation is the key to growth, and readied a series of announcements on the economy including the rejection of “fire at will” employment laws.
Cable will this week make three growth-related announcements covering no-fault dismissal, the removal of a chunk of health and safety legislation and a long-term industrial policy likely to include plans for a small business bank. The scale of the bank and the details to be announced on Tuesday were discussed over the weekend.
Cable also lifted the veil on his continuing dispute with the home secretary, Theresa May, saying he would be delighted to wield an axe over “the enormous amount of red tape around the whole immigration system, permits for workers, visas for people coming from China, students”. He has long complained about Home Office controls on skilled workers.
There have been suggestions that the reshuffle put rightwing ministers such as Michael Fallon in Cable’s department to strengthen the voice of business.
Appearing on the BBC’s Andrew Marr Show, Cable rejected the reports and angered some on the right by conceding the supply-side reforms he is to announce this week will not transform the outlook.
“The problem of growth is that we have a very serious shortage of demand. It’s nothing to do with those supply side measures basically. It’s a demand issue.”
His remarks were echoed by the Liberal Democrat deputy leader, Simon Hughes, who admitted “Plan A was not enough”, adding: “Growth hasn’t come nearly as quickly as people thought and hoped, the levers that have been pulled haven’t adequately worked.”Cable will make three announcements, starting with plans to scrap or overhaul more than 3,000 of 6,000 regulations for which the UK is responsible by 2013. David Cameron has described the rules as a “health and safety monster” stemming from the EU.
He will also promise to abolish health and safety inspections unless firms are operating in higher risk areas such as construction or energy, or if they have a record of poor performance. The right to compensation is also to be cut back. It was stressed that the initiatives were cleared withConservatives well before the reshuffle.
On Tuesday Cable will set out an industrial strategy building on a framework document published last October, and focusing on how government can support technological innovation as well as industries of the future such as energy, the automotive industry and science. Discussions continue on whether a small business bank will be announced. George Osborne has said the idea would bring together “all the alphabet soup of existing schemes” available to small businesses. Cable would like the bank to have real powers to lend and not be merely “a one stop shop” for small business.
Later in the week Cable will reject proposals from the Beecroft report, completed last October, that would allow micro-employers to dismiss staff without risk of redress other than some financial compensation. Cable said government consultation showed minimal business support for the idea, adding that greater job insecurity was undesirable at a time of low consumer confidence. Britain anyway has very flexible labour markets, he said. “There is job insecurity, we don’t want to add to it. That’s why we’re not going down the no-fault dismissal line.”
He will instead propose a statutory code of practice to encourage voluntary settlement agreements for micro-businesses, allowing staff to agree to leave a company in return for a payment. Offers made by businesses could not be used as evidence in an unfair dismissal case.
This would act as an alternative to going to an employment tribunal, which can be costly and time-consuming, and, according to businesses, makes employers less inclined to hire staff.
Cable said he was not interested in the Liberal Democrat leadership, but admitted he “very, very occasionally” talks with Labour leader Ed Miliband.
He also said he was not embarrassed to describe himself as a “centre-left” politician. “I do believe in fairness and income distribution, and I also believe in having a successful business sector and competition, a market economy. Those two things have got to be married together. That’s the big challenge of politicians in the Western world.”
The shadow chancellor, Ed Balls, heaped praise on Cable, saying: “Vince has distinguished himself by always making the argument about what’s right for Britain.”
He questioned whether Nick Clegg would also describe himself as a centre-left politician and added: “I would be very surprised if Nick Clegg fights the next election for the Liberal Democrats, and I don’t think it’s in the Liberal Democrat or in the national interest.”