Osborne’s solution to unemployment? Make it easier to unemploy people

George Osborne reignited his war on working people last night by urging company bosses to lobby the government – ie. him – to make it easier to sack staff.

George-Osborne-corpse The Telegraph reports:

Mr Osborne suggested in a speech on Tuesday night to engineering firms that they should directly lobby [employment minister] Mr [Norman] Lamb about the changes, to avoid them being watered down by unions.

He said: “We’re beginning a call for evidence on the case for a new Compensated No Fault Dismissal for our smallest businesses.

“Plenty of trade unions and others will be submitting their evidence for why we shouldn’t do this. If you think we should, and it will increase employment, then don’t wait for someone else to send in the evidence. Send it in yourself.”

The proposals were intended to apply to all firms when first suggested in a report for Downing Street by venture capitalist Adrian Beecroft last October.

The plans, which were leaked to The Daily Telegraph, proposed making it easier for all companies to dismiss unproductive workers within explanation. It claimed that current rules allowed staff to “coast along” with no action from management.

These proposals, to reduce unemployment by making it easier for people to be made unemployed, are ideas we’ve long rebutted on Left Foot Forward, as some of the links at the foot of this piece show.

As Richard Exell explained, saying workers’ rights are to blame for unemployment is as inaccurate as it is abhorrent:

At a time when people are more depressed about the economic future than for a long time it is unlikely taking away their rights at work is going to make them happier. Young people, in particular, will be hardest hit – they are, after all, much more likely to have been employed for less than two years.

Vulnerable workers, especially those without a union to support them, will be most likely to be intimidated into not taking a case to tribunal, even when it’s a good one.

And all this for really dubious economic benefits. When the Labour government brought that threshold down to one year there was no noticeable impact on employment, and there’s precious little sign of employers demanding this.

Indeed, one has to wonder how much lower down the employment protection league (see Chart 1) Osborne et al want the UK to slip, as Left Foot Forward pointed out:

By international standards, the UK does not have a tightly regulated labour market. If we take the OECD’s index of labour market regulation, the UK is right down at the bottom of the table. As Chart 1 shows, only the USA has a less regulated labour market.

The chancellor’s speech was (amongst other things) a transparent attempt to shift the blame for unemployment to workers’ rights. No one will gain a job because of these changes – but plenty of low paid and insecure workers will find they have no recourse when they are treated unfairly.

Chart 1:

Employment-protection-2008
A point reaffirmed by Declan Gaffney:

The notion of a simple trade-off between employment levels and employment protection is increasingly unrealistic.

Some, but not all, of the employment growth in Europe reflects selective deregulation over recent years, but this was from levels of protection which were far higher than those in the UK - and still are today, albeit with some convergence.

Deregulation of labour markets is not an open-ended route to increased employment, it is a strategy with diminishing returns. When protection is as low as it is in the UK, we should expect those returns to be minimal. The assumption that there are big employment gains from reducing employment protection in the UK from its current low levels belongs to the last century.

While employment lawyer Sara Ibrahim wrote about how, as per usual under this coalition, it’s the lowest paid who’ll suffer the most:

Disputes in the workplace happen. The correct way to reduce claims is to increase mediation between the parties and ensure organisations comply with existing regulations. Preventing people from issuing unfair dismissal claims is a mistake. All it shows is a lack of commitment on the part of this government to access to justice and a disregard for the low paid.

As shadow Treasury minister Owen Smith said last night:

“With unemployment at a 16 year high, the government should be making it easier for small businesses to hire people, rather than easier to fire people…

“The slower growth and higher unemployment this government’s reckless policies have delivered mean £158 billion of extra borrowing to pay for economic failure. That is why we desperately need a proper plan for jobs and growth in this month’s Budget. It’s time this complacent and out of touch chancellor listened and changed course.”

We can but hope.

See also:

• If Liz Truss wants to be more like Germany, she should boost workers’ rights – Alex Hern, February 20th 2012

• Relaxing worker protection to boost employment belongs to the last century – Declan Gaffney, November 16th 2011

• Raab’s attacks on workers’ rights are – surprise – based on no evidence – Sarah Veale, November 16th 2011

• Cameron and Osborne want the unemployed to work for £1.78 an hour – Alex Hern, November 10th 2011

• Commons to vote today on Labour’s five-point plan for jobs – Shamik Das, October 12th 2011

• Reducing job security won’t decrease unemployment – Sara Ibrahim, October 4th 2011

• Gideon’s grotesque attempt to blame workers’ rights for unemployment – Richard Exell, October 3rd 2011

http://twitter.com/mattsmith1384/status/177289960720826368 Matthew Smith

Osborne’s solution to unemployment? Make it easier to make people unemployed: http://t.co/4XPq6UYk #Budget2012
http://twitter.com/shugyokem/status/177290135086444544 shugyokem

Osborne’s solution to unemployment? Make it easier to make people unemployed: http://t.co/4XPq6UYk #Budget2012
http://twitter.com/matdanaher/status/177290836189511680 Mathew Danaher

Osborne’s solution to unemployment? Make it easier to make people unemployed: http://t.co/4XPq6UYk #Budget2012
http://twitter.com/lourolfesanders/status/177291364881534976 Louise Rolfe-Sanders

Osborne’s solution to unemployment? Make it easier to make people unemployed: http://t.co/4XPq6UYk #Budget2012
http://twitter.com/northerntuc/status/177292401226956800 Northern TUC

Osborne’s solution to unemployment? Make it easier to make people unemployed: http://t.co/4XPq6UYk #Budget2012
JC

As is often the case, you’re looking at this from the wrong point. Employment protection is important, but can be an impediment when there is slow or negative growth. We have already discouraged companies from using agency staff to help them when opportunity grows for a short time, and it is not possible to use their own staff unless they are on low hours contracts. Most companies do not want to take on another member of staff to satisfy some customer need if they are unable to lose them easily should the customer demand disappear.

What do you suggest? Bear in mind we’re not talking about Tesco’s or their like here as they use 0 hours contracts to manage this problem, it’s the smaller companies. The ones we’re hoping will provide the growth we need.
http://twitter.com/nhsspy/status/177294975770439681 Watching You

Osborne’s solution to unemployment? Make it easier to make people unemployed: http://t.co/4XPq6UYk #Budget2012
http://twitter.com/therightarticle/status/177296072098578432 Michael

Osborne’s solution to unemployment? Make it easier to unemploy people – http://t.co/S1lsYGjX
http://twitter.com/ravensrod/status/177296801391579136 Ferret Dave

Osborne’s solution to unemployment? Make it easier to unemploy people – http://t.co/S1lsYGjX
http://twitter.com/lottietweet/status/177296806298918912 Lottie

RT @leftfootfwd: Osborne’s solution to unemployment? Make it easier to make people unemployed: http://t.co/2TuTcGZj #Budget2012
http://twitter.com/michaeloldroyd/status/177301070073167873 Michael Oldroyd

Osborne’s solution to unemployment? Make it easier to unemploy people: http://t.co/4XPq6UYk by @ShamikDas #Budget2012
http://twitter.com/jintyg51/status/177319882189320192 Janet Graham

Osborne’s solution to unemployment? Make it easier to unemploy people: http://t.co/4XPq6UYk by @ShamikDas #Budget2012
http://twitter.com/cameronsfollys/status/177320713328398336 cameronsfollys

Followg on Adrian Beecroft, & Vince Cable's heals.. Osborne’s solution 2 unemployment? Make it easier 2 UNemploy people http://t.co/YljNDpwE
http://twitter.com/sarahshoraka/status/177325845080309760 Sarah Shoraka

Osborne tells British workers: I want to make it easier for companies to sack you: http://t.co/4XPq6UYk #Budget2012
http://twitter.com/cutchswife/status/177325871651241984 cutchswife

Osborne tells British workers: I want to make it easier for companies to sack you: http://t.co/4XPq6UYk #Budget2012
http://twitter.com/kendrafallon/status/177326648671215616 Kendra Fallon

RT @leftfootfwd: #Osborne tells Brit workers: I want to make it easier for companies to sack you http://t.co/4SUOafHq #Budget2012 #ConDem
http://twitter.com/nick_woodfine/status/177327687143137280 Nick E Woodfine

Osborne tells British workers: I want to make it easier for companies to sack you: http://t.co/4XPq6UYk #Budget2012
http://twitter.com/emmamari/status/177329330186240000 Emma Nicholson

Osborne tells British workers: I want to make it easier for companies to sack you: http://t.co/4XPq6UYk #Budget2012
http://twitter.com/britishroses1/status/177330180589760512 BevR

Osborne tells British workers: I want to make it easier for companies to sack you: http://t.co/4XPq6UYk #Budget2012
http://twitter.com/grozwhit/status/177333486426918912 Ian G-Whittle

Osborne tells British workers: I want to make it easier for companies to sack you: http://t.co/4XPq6UYk #Budget2012
http://twitter.com/luketstannard/status/177334717983633408 Luke Stannard

Osborne tells British workers: I want to make it easier for companies to sack you: http://t.co/4XPq6UYk #Budget2012
http://twitter.com/antoniobarbaro/status/177336177848881152 Antonio Barbaro

Osborne tells British workers: I want to make it easier for companies to sack you: http://t.co/4XPq6UYk #Budget2012
http://twitter.com/ipasho/status/177336605307179010 Irene Short

Osborne tells British workers: I want to make it easier for companies to sack you: http://t.co/4XPq6UYk #Budget2012
http://twitter.com/pikemanmark/status/177336796382892033 Mark Howard

RT @leftfootfwd: Osborne’s solution to unemployment? Make it easier to unemploy people http://t.co/8oo7V0wW
http://twitter.com/xnowherexmanx/status/177341500009623552 michael john day

Osborne tells British workers: I want to make it easier for companies to sack you: http://t.co/4XPq6UYk #Budget2012
http://twitter.com/harlowtuc/status/177348351581368320 David Forman

Osborne’s solution to unemployment? Make it easier to make people unemployed: http://t.co/4XPq6UYk #Budget2012
http://www.soylentdave.com/ Dave

0 hour contracts no longer protect employers from granting their employees statutory employment protection – it’s length of time under contract which determines your rights, not the number of hours you’ve worked.

Encouraging small – or any – businesses to take on short term employees doesn’t really help the economy, or our young people, in any meaningful way – if people aren’t getting trained (because employers have no legal encouragement or requirement), then they aren’t becoming more employable; and regularly cycling onto and off JSA (and related benefits) is more expensive for the state – due to administration costs – than just staying on it!

Surely we want to encourage long-term employment – from the employer’s side, job security is an important factor in employee satisfaction (which is further reflected in things like low sickness rates), not to mention that retaining employees means you don’t have to waste money training and supervising new staff constantly.

Employee rights don’t restrict the ability for employers to offer fixed-term contracts in times of high demand (e.g. Christmas), but they do restrict the ability for less scrupulous employers to turnover all their staff on a regular basis because they want to avoid things maternity and holiday entitlements, or even more sinister abuses of power.

(and if we deny employees a proper appeals process then we’re ultimately going to see an increase in highly expensive Supreme and European Court legal challenges, because employers ARE going to take advantage of any increase in their ability to unfairly dismiss employees without immediate comeback)
http://twitter.com/igmeister/status/177358518532308993 Ian Gray.

Osborne’s solution to unemployment? Make it easier to unemploy people: http://t.co/4XPq6UYk by @ShamikDas #Budget2012
http://twitter.com/britishroses1/status/177422836812623872 BevR

Osborne’s solution to unemployment? Make it easier to unemploy people http://t.co/KM5zx77Y #wrb #spartacusreport #nhs #democracy
http://twitter.com/themingford/status/177426444442533888 Thomas Hemingford

Osborne’s solution to unemployment? Make it easier to unemploy people http://t.co/KM5zx77Y #wrb #spartacusreport #nhs #democracy
http://twitter.com/tracyandrab/status/177429931851120643 tracy e

Osborne’s solution to unemployment? Make it easier to unemploy people http://t.co/KM5zx77Y #wrb #spartacusreport #nhs #democracy
http://twitter.com/socialistscouse/status/177432946930745345 Emma

Osborne’s solution to unemployment? Make it easier to unemploy people http://t.co/KM5zx77Y #wrb #spartacusreport #nhs #democracy
http://twitter.com/jintyg51/status/177443237999554560 Janet Graham

Osborne’s solution to unemployment? Make it easier to make people unemployed: http://t.co/4XPq6UYk #Budget2012
http://twitter.com/oilywaters/status/177486700501663744 H. O.

RT @leftfootfwd: Osborne’s solution to unemployment? Make it easier to unemploy people http://t.co/NmlmyMgj
http://twitter.com/ravisubbie/status/177505945331568640 Ravi Subramanian

Apparently Osborne is now having to ask businesses to lobby him so he can cut workers' rights http://t.co/xNuyLOni
http://twitter.com/jillycl/status/177511181613936640 JillyCL

Apparently Osborne is now having to ask businesses to lobby him so he can cut workers' rights http://t.co/xNuyLOni
http://twitter.com/rebroger/status/177513022472982528 roger patrick kelly

Apparently Osborne is now having to ask businesses to lobby him so he can cut workers' rights http://t.co/xNuyLOni
http://twitter.com/staffsunison/status/177579599327281152 Staffordshire UNISON

Apparently Osborne is now having to ask businesses to lobby him so he can cut workers' rights http://t.co/xNuyLOni
http://twitter.com/____charlotte/status/178088706857631746 Charlotte Woolven-B

George has a great solution to unemployment: Make it easier to make people unemployed. Hee hee! http://t.co/XB9FkqWe /via @leftfootfwd
http://www.leftfootforward.org/2012/03/budget-2012-tax-cuts-for-the-many-not-the-few-will-boost-growth/ Pre-budget memo to Mr Osborne: Tax cuts for the many, not the few will boost growth | Left Foot Forward

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[...] Tory donor list is Adrian Beecroft, who has proposed slashing workers’ rights – an idea enthusiastically backed by Cameron and Osborne – the idea the super rich can buy government policies with their cash, [...]
http://www.leftfootforward.org/2012/05/enterprise-and-regulatory-reform-bill/ Cameron puts anti-worker ideology before evidence in Regulatory Reform Bill | Left Foot Forward

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