Cable falls in line with Beecroft’s anti-worker voodoo economics

Alex Hern reports on Vince Cable's announcement of his and his department's support of Conservative donor Adrian Beecroft's anti-worker employment reforms

Vince Cable has signed up to the Conservatives’ battle against employment rights today, announcing his support of the vast majority of venture capitalist and Tory donor Adrian Beecroft’s report on employment law.

The Guardian reports:

Companies employing fewer than 10 staff may be exempted from employment regulations … to promote economic growth.

In a speech on Wednesday Cable will say the coalition has agreed other areas of employment law reform. He will announce:

• A consultation on introducing “protected conversations” to allow employers to discuss an employee’s poor performance or retirement in an open way that could not be used in a tribunal claim.

• An overhaul of tribunals that would mean all claims initially go to the Advisory, Conciliation and Arbitration Service. Witness expenses would be ended and only one judge would be used in unfair dismissal cases.

• A further consultation on simpliflying the use of compromise agreements in which employers pay an agreed amount to an employee if both sides agree that a contract of employment should end.

The one concession to the social democratic wing of the Liberal Democrats was Nick Clegg’s blocking of the central pillar of Beecroft’s report, which was to allow employers to dismiss any employee at any time without fault on the employees behalf. For this, we should be glad; as we reported last week, it is a terrible idea:

This would leave it entirely at the employer’s discretion to decide whether or not someone was under performing, with no system for reviewing the problem, putting in measures for improving the person, taking account of illness or the contribution of poor management to the poor performance. You cannot seriously propose to have an employment system based on hire and fire at will.

The aim behind all of these reforms is to boost the economy, but as we have reported again and again and again, cutting workers rights will do no such thing.

As Nicola Smith reported in January:

During its last period in office the Labour government introduced a number of measures which improved rights at work – for example providing employees with protection from unfair dismissal after a year of employment, introducing the minimum wage and introducing entitlements to more generous maternity leave.

The empirical evidence demonstrates that these measures did not have negative impacts on employment levels – indeed prior to the global recession employment rates were at their highest for decades. The reality is that strong employment rates are a concequence of a country’s overall economic strength, not its level of employment protection.

Sarah Ibrahim in October:

[Dr John Philpott, the chief economic adviser at the chartered institute of personnel and development] says that the evidence is that less job protection encourages hiring in boom periods but increased firing in bust periods. It therefore makes employment rates less stable during the economic cycle.

However, it does not change the fundamentals – the number of people in secure employment. He strongly takes the view that this will be detrimental for the long term prosperity of the economy by undermining any spirit of engagement between staff and management. It seems out a bad signal to people at a time when they are already feeling vulnerable.

And Richard Excell, with the killer evidence:

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 the chart below shows, only the USA has a less regulated labour market.

Employment-protection-2008

As Mehdi Hassan pointed out this morning:

Those who claim link between cutting red tape and job creation have to first explain why America has nine per cent unemployment.

Between scrapping employment rights, real terms cuts in benefits, and the moves to stop the poor having too many kids, it is clear that there is one group of class warriors in parliament, and they’re the Bullingdon boys running the country.

See also:

Cameron continues Gideon’s race to the bottomAlex Hern, October 26th 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

Osborne dreaming of a race to the bottomAlex Hern, October 3rd 2011

Cutting workers’ rights will not increase employmentNicola Smith, January 10th 2011

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