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 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.

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’ rightsAlex Hern, February 20th 2012

Relaxing worker protection to boost employment belongs to the last centuryDeclan Gaffney, November 16th 2011

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

Cameron and Osborne want the unemployed to work for £1.78 an hourAlex Hern, November 10th 2011

Commons to vote today on Labour’s five-point plan for jobsShamik Das, October 12th 2011

Reducing job security won’t decrease unemploymentSara Ibrahim, October 4th 2011

Gideon’s grotesque attempt to blame workers’ rights for unemploymentRichard Exell, October 3rd 2011

43 Responses to “Osborne’s solution to unemployment? Make it easier to unemploy people”

  1. Matthew Smith

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

  2. shugyokem

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

  3. Mathew Danaher

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

  4. Louise Rolfe-Sanders

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

  5. Northern TUC

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

  6. 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.

  7. Watching You

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

  8. Michael

    Osborne’s solution to unemployment? Make it easier to unemploy people – http://t.co/S1lsYGjX

  9. Ferret Dave

    Osborne’s solution to unemployment? Make it easier to unemploy people – http://t.co/S1lsYGjX

  10. Lottie

    RT @leftfootfwd: Osborne’s solution to unemployment? Make it easier to make people unemployed: http://t.co/2TuTcGZj #Budget2012

  11. Michael Oldroyd

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

  12. Janet Graham

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

  13. cameronsfollys

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

  14. Sarah Shoraka

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

  15. cutchswife

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

  16. 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

  17. Nick E Woodfine

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

  18. Emma Nicholson

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

  19. BevR

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

  20. Ian G-Whittle

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

  21. Luke Stannard

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

  22. Antonio Barbaro

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

  23. Irene Short

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

  24. Mark Howard

    RT @leftfootfwd: Osborne’s solution to unemployment? Make it easier to unemploy people http://t.co/8oo7V0wW

  25. michael john day

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

  26. David Forman

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

  27. 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)

  28. Ian Gray.

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

  29. BevR

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

  30. Thomas Hemingford

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

  31. tracy e

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

  32. Emma

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

  33. Janet Graham

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

  34. H. O.

    RT @leftfootfwd: Osborne’s solution to unemployment? Make it easier to unemploy people http://t.co/NmlmyMgj

  35. Ravi Subramanian

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

  36. JillyCL

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

  37. roger patrick kelly

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

  38. Staffordshire UNISON

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

  39. 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

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