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14 September 2012

Labour turns on Cable over “capitulation“ to the Tories

Chuka Umunna says reforms to employment law are an attack on workers' rights.

By George Eaton

Last week, Vince Cable was eulogised by Ed Balls as the Lib Dem who could no almost wrong. “Vince has distinguished himself by always making the argument about what’s right for Britain,” he said, as he beamed at the Business Secretary, sat beside him on Andrew Marr’s sofa.

But Balls’s colleague Chuka Umunna, the shadow business secretary, isn’t feeling so charitable towards Cable. Earlier this morning, Umunna took to Twitter to criticise the Business Secretary’s reforms to employment law as an attack on workers’ rights. He added that Ming Campbell, who has questioned Cable’s textual relations with Labour, should worry more about “Cable’s capitulation to Fallon, Hancock and co. on employment law”

While Cable will today formally reject calls for the introduction of “no-fault dismissal” or fire-at-will (a proposal that emanated from Tory donor Adrian Beecroft’s now-infamous report on employment law), he will announce a significant cut in the cap on unfair dismissal payouts. The current £72,000 limit is expected to be reduced to an employee’s annual salary, or another lower figure. In addition, employment tribunals will be sped up, so that costs are reduced and weak cases thrown out more swiftly. Though you wouldn’t know it from the right’s response, 80 per cent of Beecroft’s recommendations have been adopted or put out to consultation.

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Continuing his assault on Cable, Umunna declared, “We’re not in a recession because of the rights our constituents have at work – its cos of the govt’s failed economic plan.” The Business Secretary, of course, wouldn’t disagree. During his appearance on Marr last week, he sagely observed, “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.”

As a result, suspicion persists among the Tories that Cable’s heart isn’t really in it. But whatever the Business Secretary’s true feelings, a third successive quarter of recession persuaded the coalition partners to strike a grand bargain on growth. You give us supply-side reform, and we’ll give you a small business bank (a measure that allowed Cable to hail the end of “pure laissez-faire” economics).

Umunna’s decision to respond with an attack of rare ferocity suggests that not everyone in Labour is so keen to lure the Business Sectetary from the Tories’ clutches.