View from Westminster - May 31, 2012

THERE are a great many issues struggling to make the front pages of the national newspapers at the moment. One is the Beecroft Report on employment law reforms. This is a series of suggestions commissioned by Number 10, to look at whether our employment laws are fit for the current economic environment and competitive on the global stage.

There is no doubt about it; there is a need for protection of employees. The idea that we could possibly go back to some sort of Dickensian employment regime is terrifying and it is absolutely correct that all workers must have rights. But with all things to do with our society, the pendulum sometimes swings too far in one direction or another and so it is right that Adrian Beecroft has taken a look at the current situation.

At the heart of the issue is the question: how do we get more people employed? One of the answers is to make it easier for employers.

The fact is employers have seen a staggering 43,387 new regulations under the previous government – 14 for every day. This has cost businesses £77 billion since 1998 as small businesses spend seven hours, on average, a week just form filling.

For the economists amongst us, this is estimated to be a cost of 12 per cent of our GDP. Amongst all of this is a cost to businesses of employment tribunals. So for small or even micro business to take on staff, there is a genuine fear that hiring employees brings with it not just an increase in the regulatory burden, but it also increases the risk of litigation.

Businesses need government and bureaucracy to get off their backs. The single biggest challenge to a business is taking their product to market, winning customers and then delivering.

Anything that stands in the way of, or distracts from, that incredibly important focus for all businesses has to be detrimental to that business and therefore to the economy as a whole.

The Beecroft report is part of a raft of measures intended to encourage growth, investment and, crucially, employment.

Despite the widespread gloom, there is good news out there. A total of 634,000 new private sector jobs have been created since 2010. Whilst public sector jobs have been lost, the net increase is 264,000 jobs created since 2010.

The budget deficit has already been cut by a quarter and for the first time since the ‘70s, this country is a net exporter of cars.

But whilst that is encouraging, it is still vital that the government does everything it can to help businesses; to help get people back into work where they have lost their jobs; and get young people into their first jobs. That is why the rolling back of bureaucracy is vital to support growth, and the Beecroft report is part of that.

CONTACT YOUR MP

Email: mark.garnier.mp@ parliament.uk.

Telephone: 020 7219 7198 or 01562 746771.

Write: 9a Lower Mill Street, Kidderminster, DY11 6UU, or House of Commons, Westminster, London SW1A 0AA.

Comments(6)

Red Flag Dan says...
3:18pm Wed 30 May 12

If this report - which was commissioned by the Department of Business Innovation & Skills - prepared by venture capitalist and millionaire Tory donor Sir Adrian Beecroft in conjunction with staff assistance from BIS was implemented in full, we would see the biggest ever attack on the rights of people at work.

Beecroft proposes scrapping Unfair Dismissal, and in his original report which was leaked to the national media, states that this would allow Employers to sack Employees “simply because they did not like them”. Mr Beecroft believes that this proposal, which would undoubtedly lead to massive redundancies is a “price worth paying”. I find it disgraceful that this Government has not learnt the lessons from the 1980’s, when we last had a Tory Government telling us that unemployment was “a price worth paying”. What is noticeable about Mr Beecroft’s report is that there is not a scintilla of evidence to back up his recommendations. Indeed, David Blanchflower, a former member of the Bank of Englands Monetary Policy Committee said there was “zero basis for Beecroft’s claims.”

We are not in recession because of our employment regulation system, it is as a direct result of this Government’s failed economic policies. The Government should be making it easier to hire workers, not fire them. Implementing a “fire at will” policy will do nothing to increase employment, and will clearly have a negative consumer impact as workers who fear for their jobs do not spend money on their local high street. Recent figures show that sales volumes on the High Street fell by 2.3% - this proposal risks creating more uncertainty and worsening confidence. To end the recession made in Downing Street what we need is a credible plan for jobs and growth, not Beecroft’s fire at will ideological manifesto. Indeed, professional experts in the employment field, like the Chartered Institute for Personnel Development, are clear. They have said that there is no economic benefit and “if you look at the evidence on unfair dismissal there isn't actually anything to suggest that watering down those rights would create any more jobs and indeed the job insecurity it would create would actually be bad for the economy and businesses”. This is a view echoed by the Institute of Chartered Accountants in England and Wales (ICAEW) with the CEO saying: “there’s not actually any hard evidence (that we’ve seen) that deregulation will increase employment or GDP growth”…and in relation to the firing at will, “fear of redundancy could discourage the consumer spending our economy needs.”
But it is not just Unfair Dismissal that Mr Beecroft and this Tory-led Government have set their sights on. In his original report, before it was censored by Downing Street, Beecroft recommended dropping legislation on flexible working for parents and scrapping licensing regarding employment of children. It also suggests the scrapping of the Gangmasters legislation that was set-up on the back of the 23 Chinese cockle pickers in Morecambe and the relaxation of the National Minimum Wage that will put ordinary hard working people up and down the Country back to the bad old days of £2 per hour. The Labour Party is fully opposed to these proposals which would take us back to a Victorian Era level of labour regulations becoming Law.

This report is symbolic of the omnishambles that is this Government.

Jerome K says...
4:38pm Wed 30 May 12

Would Garnier be supporting legislation that entitled an employer to fire at will if one of his own family was on the breadline worrying about whether they could be fired for no reason? Of course not. Scum.

Stephen Brown says...
4:41pm Wed 30 May 12

As I predicted last week, Mr Garnier reverts to type this week.

Here, he just re-phrases his Worcester News column (also as I predicted last week) from last week and is once again given free reign to spout Tory central office ideological propaganda with no basis in fact and little widespread support from business, unions or anyone else except Tory central office who have received £500,000 in funding from Adrian Beecroft who they asked to write the report. Get the reasons and link?

Why he can't just report on what he's actually done on behalf of his constituents is beyond me. It seems he's a man with nothing to say, but saying it very loudly.

Gobby Robby says...
4:50pm Wed 30 May 12

Countries that are doing well in this recession like Germany and the Scandinavian countries have high worker protections so the argument that you need to reduce them is tosh. In the developed world Britain is behind only USA in terms of low worker protection. Mark wants to get rid of even more of our rights, what a lovely bloke. When Mark says "The idea that we could possibly go back to some sort of Dickensian employment regime is terrifying" he's obviously lying. Mark & his chums would like nothing more for us to be like Hong Kong where unbridled wealth for the few nestles beside people living in shacks and cages like animals.

walkerno5 says...
10:23am Thu 31 May 12

Fastest way to cut employment red tape is the PAYE tax & NI system, which as anyone who has to use it knows is far more complicated than it needs to be. The concept and current rate of Employers' NI is also not helpful - we're increasing taxes on employing people and reducing taxes on profits made. Increased corporation tax would be a more appropriate way to get this value from employers.

Employers already have the right to dispose of staff within the first six months with very little explanation or reasoning, that's more than adequate to find out someone doesn't fit, and if it isn't long enough, that's bad management.

HowardM says...
12:39pm Thu 31 May 12

I fully endorse all the comments on here, except, predictably, most of those by Mark of course. As a senior, elected trade union officer within the DTI (now the Business Dept) under the Thatcher/Major governments, the attacks on employee rights were swingeing.
The increased protection by Blair that Mark mentions was only restoring rights put in by Wilson and Callaghan cut by the subsequent Tory governments.
At the end of the day we are not surfs in the ownership of employers to be treated as possessions to be hired and fired on a whim! All that most of us have to offer (except those born to wealth and privilage) is the ability to do a "fair days work for a fair days pay" and be treated with respect whilst doing it. The employer isn't doing us a favour employing us - without his workers he wouldn't even have a business. Therefore it is only right that employment comes with a contract binding on both sides. It is also only right that those employed have the right to protection not to be sacked on the whim of an employer for no valid reason. The proposals under consideration may not take us back, as Mark mentions, to Dickensian standards but it will take us back to the 1930's - that is to be opposed at all costs

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