To be denounced as “a socialist” by a venture capitalist and Tory donor certainly counts as a compliment by my reckoning.
Adrian Beecroft might not have noticed when he meant to insult Vince Cable, but given the recent electoral success of Francois Hollande in France, Elio du Rupo in Belgium and Alexis Tsipras in Greece it doesn’t seem the political trend as European economies continue to crumble is for voters to shelter in the austere arms of the right.
But it is a path the Westminster government seems intent to remain on. Described as the UK government’s “most important independent economic policy review so far” in The Telegraph, the Beecroft Report is a continuation of the coalition’s Red Tape Challenge – getting rid of all the regulations impeding the economy – moving this time to focus on employment law.
The coalition has already diminished workers’ rights, by increasing the qualifying period to two years before a worker is able to claim unfair dismissal. But in his 16 page report, Beecroft proposes a decidedly Dickensian way for us all to be in it together.
Unfair dismissal rights removed from employees and replaced by the employer’s right to no-fault dismissal, including complete immunity from unfair dismissal claims for small employers. Reducing the statutory redundancy consultation period from 90 to 30 days. Reducing rights for TUPE and collective redundancies. Introducing fees for tribunals and letting employers ignore their statutory liability in third party harassment cases. Excluding small businesses from the pension auto-enrolment. Not compelling employers that lose an equal pay case at tribunal to conduct an Equal Pay Audit. Allowing companies to choose to opt-out of flexible parental leave, right to request flexible working, and licensing for employing children.
As barrister David Renton dryly notes, “Imagine: if, by waving a magic wand, the Coalition could undo every employment law reform of the past 40 years.”
Beecroft’s assault is based on the premise that removing employment rights increases employment – an assumption even the Financial Times states is “unproven”.
But this is nothing new. A previous liberal-conservative coalition has tried this before.
In 2006, Australian PM John Howard enacted the Workplace Relations Amendment Act 2005. This legislation massively revised Australia’s industrial relations legislation, in an attempt to improve employment and economic performance through dispensing with unfair dismissal laws, reducing rights to strike through requiring workers to bargain for previously guaranteed conditions without collective representation, and significantly restricting trade union activity.
Studies into the impact of WorkChoices, the Orwellian name for these interventions, showed a climate was created “where some employers licensed to act with unilateral disdain”, with cuts in conditions without improvements in pay or conditions. More than a million Australians suffered a real pay cut due to changes in setting the minimum wage, hundreds of thousands lost annual leave, overtime and public holidays, and more than 3.5 million Australians lost protection from unfair dismissal.
But was it worth it? In the phraseology of the coalition, was it “a price worth paying”?
According to Dr Sarah Wright, decentralising wages had no impact on increasing labour productivity. Getting rid of unfair dismissal protection did not encourage employers to take on more staff, with employment growth decreasing from 3.9% in 1994 (when the protection was introduced) to 2.6% after the protection was abolished. Wages share declined from 56.2% of national income when Howard came to power in 1997 to 53.3% by 2008.
As Wright states: “The Government at the time argued that WorkChoices would create more jobs, lift wages and result in a stronger economy; WorkChoices had the opposite effect”.
Back in Britain, apparently the intervention of the Liberal Democrats will ensure Beecroft’s proposals are consigned to the filing cabinet where they’re storing all the rest of Steve Hilton’s nutty ideas.
But much like ignoring the elections of socialists elsewhere on the continent, the Tories might want to note, given WorkChoices was one of the major issues in the 2007 federal election campaign, just what happened to Howard’s government (and his parliamentary seat).
Workers’ rights should be universal. I suspect voters’ reactions to having them removed might be likewise.
#1 by N Murray on May 24, 2012 - 3:07 pm
Interesting the above opinion comes under the banner of a blog entitled ‘Better Nation’ on the eve of the formal launch of the yes campaign for independence.
Everyone knows the referendum will be won or lost on economic grounds so to brazenly promote an anti-growth sentiment seems somewhat self-defeating.
It would be terrible for the economy if we moved towards such onerous employment regulations like those that exist in France, where accordinly companies take the view it is better to employ people on temporary contracts rather than on a permanent basis.
Admittedly, there is a balance to be struck, but right now the priority should be economic growth – that is something everyone will benefit from.
#2 by Kirsty on May 24, 2012 - 3:34 pm
Thank you for your comment. I refer you to the experience in Australia detailed above where slashing workers’ rights had a negative effect on economic growth. I’m also pretty sure the SNP would be aghast at the suggestion that an independent Scotland would be one without basic employment rights – it’s certainly not a vision of a Better Nation I would care to live in.
#3 by Pads on May 24, 2012 - 3:30 pm
#1 There is no evidence that the current balance is incorrect.
#4 by Nikostratos on May 24, 2012 - 8:10 pm
No surprise a vulture capitalist would like to hire and fire anyone anywhere at will with no consequences.
Just reflects his limited experience outside of the thieving,lying,cheating world of private equity piracy.
Still Beecroft has a point there never ever was an economic crisis before the introduction of individual employment rights .
well I(like many a right wing nutjob Tory) would like to believe that to be so
#5 by Allan on May 24, 2012 - 9:42 pm
Whaaat, removal of workers rights does not result in higer employment rates. Well who’d ‘ave thunk it!
The reality is that Beecroft’s proposals are in themselves anti growth as it would have made it easier for companies to sack people, which would mean an increase in benefits which in turn would mean more people on benefits and then a higher benefits bill at a time when Government and the media are intent on deamonising anyone on benefits. In short, less people on full wages means less people contributing to the liquidity of the economy – the lack of which is the real reason why there is practically no growth in the economy. That and Osborne has already scared the horses.
Of course, one of the measures that the government could take is a cut in Income tax for low paid workers going much further than the Lib dem’s proposals. But I don’t see that happening, there’s tax cuts for the rich to be paid for!