Unions criticise opposition party’s deregulation proposals

In August 2007, the opposition Conservative Party’s economic competitiveness policy review group published wide-ranging proposals with a strong emphasis on cutting business regulation. The proposals included repealing the UK’s working time legislation and opting out of EU social policy directives. Trade unions strongly criticised the report, while employers gave it a cautious welcome.

On 17 August 2007, the opposition Conservative Party’s economic competitiveness policy review group published a wide-ranging report entitled Freeing Britain to compete; among other things, the report proposes extensive measures to cut business regulation.

The policy review was chaired by former minister John Redwood and the Chief Executive of Next fashion group, Simon Wolfson. It was set up by the Conservative leader David Cameron in January 2006 to ‘undertake the long-term thinking required to reverse the decline in Britain’s competitiveness’. The review group’s recommendations will be considered by the party leadership for possible inclusion in the Conservatives’ next election manifesto.

Key proposals

The report’s aggressive approach to deregulation includes more rigorous scrutiny procedures within Parliament, the use of ‘sunset’ clauses in regulations (placing a time limit on their application unless specifically renewed), a lengthy list of existing measures earmarked for repeal and a major new deregulation initiative to be pursued within the European Union.

In the industrial relations sphere, the review group’s proposals include the following:

• repealing the Working Time Regulations (UK9810154F). The review group argues that the regulations impose significant costs on companies, ‘restrict people’s access to overtime, and reduce businesses’ flexibility to respond to their employees’ wishes, as well as their ability to manage their workload sensibly’;

• ‘restoring the statutory dismissal procedures to the pre-2000 position’;

• ‘restoring the UK opt-out [UK’s earlier opt-out from the social chapter of the EU Treaty], and producing UK rules on works councils, part-time and fixed-term working, sex discrimination, [and] information and consultation. These should balance the interests of existing employees with the need for a flexible labour market to create more jobs’;

• ‘improving the risk assessment regime in the Health and Safety at Work Act 1974 to make responses more proportionate’.

The report describes ‘over-regulation by the EU’ as being ‘the main problem’. It proposes that, in the absence of extensive deregulation at EU level, the UK should seek further opt-outs from ‘the areas of [EU] regulation that we think are most damaging, or where we could improve job creation and the lifestyles of UK people by replacing the EU rules with our own. This would include all employment and social regulation.’

Trade union reaction

The Trades Union Congress (TUC) strongly attacked the review group’s proposals, branding them as ‘extreme’. TUC Deputy General Secretary, Frances O’Grady, described the proposals as follows:

Mr Redwood’s proposals add up to a pretty extreme package … that will hit people at work – particularly working women. Opting out of the social chapter would end the right for working parents to take emergency unpaid leave when a child is ill. Repealing the Working Time Regulations would end the right to take four weeks’ paid holiday – a measure that has mainly helped low-paid working women. You cannot support these measures and also claim to back better work–life balance.

The latter statement was a reference to Conservative leader David Cameron’s calls for more flexible working.

With regard to the proposals to opt out of the social chapter and repeal the Working Time Regulations, Ms O’Grady continued: ‘Neither of these could happen without the agreement of the EU. As it is impossible to see every other EU government agreeing to these special exemptions for the UK, they could only be implemented if we left the EU.’

Employer views

The employers’ body, the Confederation of British Industry (CBI), responded cautiously. CBI Director-General, Richard Lambert, welcomed the broad thrust of the report. He stated that ‘the aim of a simpler, more competitive … regulatory framework is the right starting point’, but noted that ‘those drafting the next [Conservative Party] manifesto need to pick carefully through the [proposals] as some are more practical than others’.

Mr Lambert added: ‘A focus on cutting regulation and red tape, one of the biggest irritants for firms trying to succeed and expand, is also positive. Too often, while our European competitors manage to implement EU directives in a few pages, the UK gold-plates them with reams of prescriptive and complex regulations and guidance.’

However, he conceded that ‘extracting the UK from existing EU directives is a less certain win’ and that ‘opting out [of the EU social chapter] now would be a slow and painful process, damaging the UK’s relationship with the EU and causing yet more upheaval for employers’.

Mark Hall, IRRU, University of Warwick