Gordon Brown is to press ahead with plans for more part-time working rights for 4.5m staff, rejecting demands from business leaders that the measure be dropped when new laws are announced on Wednesday in the Queen’s Speech.
The prime minister’s aides say the government’s last full legislative package will help Britain through the recession, but some business leaders warn it could make matters worse.
The decision to go ahead next April with new flexible working rights in the middle of a recession is a setback for Lord Mandelson, business secretary, who said in October he would review the timetable.
But Lord Mandelson faced a fierce backlash from Labour MPs and ministers, led by Harriet Harman, leader of the Commons, who insisted parents with children as old as 16 be given the right to request part-time working.
Although the measure does not require primary legislation – and is not formally part of the Queen’s Speech – business leaders hoped Mr Brown would use Wednesday’s legislative debate to signal a delay.
“We’ve had a discussion with Peter Mandelson about a possible one-year moratorium on all (business related) regulations,” Miles Templeman, director general of the Institute of Directors, told the Financial Times.
But weekend reports that Lord Mandelson was rewriting the Queen’s Speech to delete measures opposed by business have proved wide of the mark.
One government official confirmed on Tuesday the flexible rights were going ahead on schedule as part of a drive to get the economy through the recession “as quickly and fairly as possible”.
“We have made the judgment that the costs are outweighed by the benefits,” the official said.
The decision was described as a “bad message to business” by David Yeandle, head of employment policy at the EEF manufacturers’ body. New regulation was also opposed by David Frost of the British Chambers of Commerce.
Some business leaders also oppose a bill allowing local authorities to levy supplementary rates on business to fund infrastructure projects, a measure seen by the IoD as a potential stealth tax on companies.
Hazel Blears, communities secretary, said on Tuesday the bill would go ahead and would help fund projects including Crossrail, the London rail scheme.