Sunday, 27 March 2016

BVCA and the Beecroft Report

I think it's fair to say that the Beecroft report, prepared by Tory donor Adrian Beecroft, was not universally welcomed in the labour movement.

One of the more controversial elements was the introduction of employment tribunal fees. The intention behind this policy was to discourage employees from making claims, because of the presumption that many of them are frivolous and could be initiated at no cost to the employee. Under the new system, employees pay ranging from a couple of hundred quid to £1,200 depending on the complexity of the claim.

Obviously the introduction of fees changes employees' willingness to initiate a case. The question is does it just discourage frivolous cases, or does it also discourage those with genuine claims but who aren't confident of winning? What we know so far is that there has been a sharp drop in claims, with sex discrimination cases falling most. According to this parliamentary briefing they fell by 83% in the year after the fee came in.

To be clear here: either the large majority of claims of sexual discrimination claims were groundless, or the introduction of tribunal fees is contributing to protecting those employers (or those that work for them) that discriminate against women.

As a party that seeks to represent working men and women, Labour has to take these issues seriously. And indeed we committed to abolishing the fees in the manifesto (after what looks to have been a bit of stalling it has to be said). The commitment is on page 23 of the 2015 manifesto here.

Not all organisations were so opposed to either the Beecroft Report overall, or the introduction of tribunal fees in particular. For example, the BVCA, the private equity industry trade body, was an enthusiastic supporter (perhaps not surprising given that Beecroft is a private equity guy). For example, here is what they said in their 2012 Budget submission:
On employment, we fully endorse the Beecroft Report as a step in the right direction. In particular, a “no fault” termination similar to that applied in the USA where notice is given under the employment contract would create a more efficient process as well as encouraging a more flexible and fluid workforce. 
So the BVCA saw the Beecroft reports as a way to make the "workforce" to be more "flexible and fluid". I don't think the objective here was job or employment security somehow.

Luckily, Beecroft didn't get implemented in full, but obviously the introduction of tribunal fees did. And, again, the BVCA was supportive (see top of page 6 here).
As recommended in the Beecroft Report, a fee which employees themselves have to meet should be introduced into the tribunal system. 
To be honest, I wouldn't expect employers, private equity firms or their lobbyists to take a position much different from this. Successful private equity managers are exceptionally well paid, and they have an interest in keeping labour costs low and employment protections weak. They expect their trade body to fight their corner. Beecroft's report was a long howl at how difficult it was to get rid of unwanted employees. And the BVCA fully endorsed it.

That's OK, because in the same way private equity has the BVCA to lobby for its interests, including making it easier to fire workers and harder for workers to take employers to tribunals, we have trade unions, and a Labour Party, to fight the corner for employees in return. They have their views, we have ours. In the case of Beecroft these views were polarised, and on tribunal fees they were diametrically opposed.

Now I'm a moderate lefty. I favour keeping the communication channels open, even where we disagree. The labour movement needs to understand the private equity industry and how it works (including to what extent its success represents value skimming). But I would sup with a long spoon. And I'm really not convinced it's a good idea to take money off them.

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