NESS Secretary Vince Cable has shot down new plans to make it easier for companies to sack under-performing staff.
Liberal Democrats said the proposal to scrap unfair dismissal rules, contained in a leaked report for the coalition by venture capitalist Adrian Beecroft, would not get off the ground. Aides to Cable said there was no evidence to back the idea and it was unlikely to improve flexibility in the labour market.
Downing Street advisers also believe the Beecroft plans are unlikely to be make it onto the statute book.
Their cool reaction came after the leak of Beecroft’s report, which said unfair dismissal laws deter small businesses from hiring staff and hit competitiveness.
If the government wants to encourage economic growth, Beecroft said, it must move to make labour markets more efficient, creating more jobs.
John Longworth, director general of the British Chambers of Commerce, said the fear of “costly” tribunals deterred firms from taking on staff.
Nine per cent of claims were struck out before a hearing took place, according to Ministry of Justice figures for April to June.