To Beecroft or not to Beecroft


             We read of a row between Vince Cable and George Osborne over the ideas in the Beecroft Report. Yesterday the government at last published the document, and told us they are getting on with implementing 17 of the 23 proposals, and are consulting on the  others.   The Department putting them into place and consulting on the rest is of course the Business Department led by Dr Cable.

                 Labour had their way with an Urgent  Question, so urgent that no-one in the House had yet seen the full report. The Opposition just bashed away against something they called “fire at will”.  They seemed to think the government was about to introduce that for all employees,  destroying in one simple blow all employee protections.

                    The Minister answering tried to explain that the Beecroft proposals in this area would only apply to firms with under 10 employees, and  did not amount to fire at will anyway. Much employee protection law is supported by the government, and much is mandated by EU law, making it impossible for Parliament to change it without a new relationship with the EU being established first.

                    Labour pointed out that employees and Unions had been most co-operative at Ellesmere Port to secure the new Vauxhall investment recently announced. They said it showed there was plenty of flexibility already. The government replied that they agreed, but  it was still a good idea to look at what it is that puts a lonely entrepreneur off employing their first employee. Perhaps too much employment law and too big a penalty if you get the hiring wrong  does keep more people on the dole and mean more businesses never grow beyond sole traders.

                            Sensible Labour contributors agreed that to be competitive the UK needs a flexible workforce, and claimed that the last Labour government had recognised that. Sensible Coalition MPs said that employees need rights: the aim should not be to return to all powerful employers who can fire on whim or  exercise unfair discrimination.

                            There is plenty of scope to reach some agreement on how to make the employment of new workers by small companies more attractive to employers. It would be helpful in promoting recovery.

                                    I asked how much extra GDP we might get from the full Beecroft. The government said it did not know. I suspect it would be mildly positive, but  it is unlikely to be the game changer that tips us into fast growth on its own. That still requires action on issues like banks, credit and energy prices.

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  1. norman
    Posted May 22, 2012 at 6:00 am | Permalink

    All this will amount to is a nice bit of pantomime, for various reasons what eventually comes out the other end won’t make a whit of difference so it’s best just ignored and let the politicians have their little bit of fun.

    • Mike Stallard
      Posted May 22, 2012 at 8:01 am | Permalink

      No. this is wrong.

      The Labour Party under Mr Blair was brilliant, for a time, at spin. People actually believed that Mr Blair was the answer to all Britain’s problems. Harold Wilson spoke, brilliantly of the white heat of the technological revolution. Mr Blair spoke continually about “modernisation”. And even sensible people believed him. On three occasions.

      Ed Miliband and Ed Balls follow in the same tradition. The “savage cuts” are, as we know from this blog, a lie. There aren’t any. In fact, the debt is increasing fast. So is the deficit. Now we have instant dismissal of loyal and fine factory workers by their cruel Tory bosses. That, too, is a lie. But it is something that a lot of people, faithful Union Members all, are going to believe.

      And what with the election boundaries as they are, and what with the pressing needs of reform being derailed at every opportunity by the Lib Dems, I can see where it is all going to end up.

      Can’t you?

      • Susan
        Posted May 22, 2012 at 2:43 pm | Permalink


        Its leading to a Lib/Lab or Labour Government at the next Election. I actually interpreted Normans post differently. I thought he meant whatever the Politicians do will make not a jot of difference to the mess the UK is in.

        I think you are right to say that at the time of Mr. Blair winning his first Election he was seen as the new hope for the UK. Goodness knows why because I never voted for him. After that I think the public voted for him because of the feel good factor from a booming economy.

        It is pretty difficult for people to vote for a political party that has labelled itself the nasty party which the Conservatives did. So ever since the Conservatives have had to try to lose this label and have never really succeeded in doing so with the voters. This has made it so easy for the Labour Party, when a policy comes along that is likely to be controversial to say “same old Tories”. The public instantly know what Labour mean by this.

        I think under David Cameron the Conservatives have never really been able to find a proper identity because no one really knows what he stands for himself. Being in the Coalition has further undermined their ability to set out a Conservative vision for how they want to be as a party and in what direction they intend taking the UK.

        • Tad Davison
          Posted May 22, 2012 at 8:24 pm | Permalink

          See, I don’t disagree with you all the time, I think uou have a point, but let’s not forget things like crime. The Tories always promote themselves as the party of law and order. That’s a bit like Andy Pandy claiming to be the heavyweight champion of the world!

          The late Geoff Dickens and I sometimes used to collude (losely) to put that man Clarke on the spot, and it was only when Michael Howard became Home Secretary, did things begin to change for the better. But it was all too late, and nobody believed the Tories anymore. They are still a tainted brand, and they’re not really doing themselves any favours at the moment. So it wasn’t just the economy, although by the time they left, we’d had a few years growth, and I think we’d find the level of debt in 1997, very useful at this time.


        • norman
          Posted May 23, 2012 at 5:48 am | Permalink

          Yes, that’s what I meant, as employment law is mainly an EU competence now all this will allow is a bit of Lib Dem vs Conservative posturing, a bit of pantomime (we’re holding the evil Tories at bay, we’d be cutting loose with real reforms were it not for the Lib Dem anchor), with nothing of substance coming out the other end.

  2. GeoffM
    Posted May 22, 2012 at 6:23 am | Permalink

    Restructure Vincent’s dept to save 23B pounds and then remove employers NI

    • David John Wilson
      Posted May 22, 2012 at 9:42 am | Permalink

      A reduction in employer’s NI should be a priority aimed initially at small companies and the under 24s.

      It has so many advantages which include improved cash flow, reduction in prices including exports and improveed competition with imports, increased youth employment etc.

    • Gewyne
      Posted May 22, 2012 at 12:47 pm | Permalink

      Agree this is the fastest solution available at the moment. Give companies a plan – Employers NI stops in 2 phases.

      Phase 1 immediately – Companies that already consider eNI a wage costs can pass the money onto the employees. This gives employees a nice pay rise, meaning more money to spend in the economy (as well as income/sales taxes).

      Phase 2 in the future – Companies not passing on the savings get to stop eNI.

      Now there is no job creation tax for companies. As for the Department of Business Innovation and Skills – seriously just bin it. The saving would be better used as a cut in Govt Spending or giving to investment groups working ala The Dragons Den and Banks Small Business Loan dept’s getting business start-ups or looking for expansion access to much needed money.

    • libertarian
      Posted May 22, 2012 at 8:49 pm | Permalink


      It really isn’t difficult at all is it, no one in the BIS has any real experience of business what is the point of it? Scrap it and do something useful as you say such as scrapping NI

  3. Pete the Bike
    Posted May 22, 2012 at 6:41 am | Permalink

    What would be a game changer is the government slashing taxes, leaving the EU, repealing almost all of the laws passed in the last 25 years and cutting it’s size by 60% or more.
    Britain would have a chance to become what it used to be, free and prosperous.

    • lifelogic
      Posted May 22, 2012 at 10:55 am | Permalink

      Alas they are, unbelievably, in practise just increasing the size or the state, increasing the price of energy and increasing regulations all over the place in a mad anti growth suicide mission – for the next election.

    • backofanenvelope
      Posted May 22, 2012 at 11:16 am | Permalink

      Unfortunately, before Mrs Thatcher, we might have been free but we weren’t all that prosperous. Mrs T turned round the ship of state and revived national morale.

  4. oap
    Posted May 22, 2012 at 6:51 am | Permalink

    Sounds like another storm in a teacup – a more displacement activity by the Business Secretary.

  5. lifelogic
    Posted May 22, 2012 at 6:59 am | Permalink

    Beecroft is far to little to late. It would make a big difference to small businesses allowing them to manage employees more efficiently and take people on with lower risk so more jobs. But just to companies with under 10 employees! It should be all companies (and the state sector) why only help small ones? Why take someone on and risk perhaps £10,000 in legal cost at a tribunal even if you are in the right and win you case! It is just a benefit scheme for lawyers.

    It is true however that confidence (which the socialist tax borrow and waste approach of Cameron, and his likely loss of the next election is clearly killing), bank lending, cheap, non green religion, energy and a smaller state and lower taxation are still the main things needed for some real growth.

    After all no employer, I know of, wants to get rid of an employee who is doing their job well. Why on earth would they? The replacement might well be far worse and they have to find and train them.

    I see that true to form it is reported that in the telegraph that “David Cameron accused of suppressing key recommendations from an “independent” report by Adrian Beecroft that warned that the Coalition’s family-friendly policies would undermine Britain’s economic recovery.” Cameron should also go back on his absurd gender neutral insurance and no retirement rules while he is at it.

    • uanime5
      Posted May 22, 2012 at 6:16 pm | Permalink

      Companies can already hire people on a temporary contract which removes most of the risks. The facts that these companies don’t do this is not the fault of the employee.

      Also some employers want to get rid of employees that are doing their job well because they believe they can get someone to do the job just as well for less money or they don’t like the person (wrong gender, wrong skin colour, pregnant, young children, etc).

      • JimF
        Posted May 22, 2012 at 9:37 pm | Permalink

        You just cannot have ever run a Company or even part of it. You have to get your story right. Either we are unscrupulous and only ever want the lowest cost employees to work like slaves, or we only want to employee ethnically and gender-correct folk, never mind the cost. You can’t have it both ways.

      • lifelogic
        Posted May 23, 2012 at 5:05 am | Permalink

        It is not as simple as you suggest (on temporary contracts) and you always still remain at some risk. Employers do not want to get rid of good people. Why on earth would they. They would need to recruit afresh and train with all the risks, hassle and costs involved.

  6. alan jutson
    Posted May 22, 2012 at 7:29 am | Permalink

    I think Mr Cable needs to learn a little about collective responsibility, and keep his comments to himself until it has been discussed in full.

    A simple answer to any question would be, we discuss lots of things which never come to fruition, wait and see what is proposed then I will let you have the details in full.

    Labour scare tactics seem to get all of the headlines, your PR men are failing once again John.

    • Tad Davison
      Posted May 22, 2012 at 11:48 am | Permalink

      Aided and abetted by the good old BBC who love to knock the Tories and the right, regardless of the legitimacy of the case.

      The wise sages in the Commons yesterday kept their own council until the facts were known. Not for them to go off half-cocked, which makes me wonder about the people who tabled the question in the first place. Opportunism maybe?


  7. Greg Tingey
    Posted May 22, 2012 at 7:37 am | Permalink

    I still fail to see how making it easier to sack people is going to improve the chances of people getting jobs.
    Do please tell?

    Reply: The proponents claim that small employers do not hire staff for fear of not being able to get rid of them if they perform badly.

    • lifelogic
      Posted May 22, 2012 at 8:10 am | Permalink

      When I take someone on I have to consider the risks and all the hassle It causes and if it is worth it. Clearly the smaller these are the more likely I am to tax people on.

      I do not know how demand will go so I might need to let them go if it declines again why would I bother if the risk is greater than the rewards and the hassle.

      Easy hire and fire is best for employees and growth too in the long run. You do not want your businesses handicapped by inflexibility, legal risks and costs, and duff employees they cannot replace.

      • lifelogic
        Posted May 22, 2012 at 10:56 am | Permalink

        Sorry “take people on”.

      • Bazman
        Posted May 22, 2012 at 5:09 pm | Permalink

        You have it with agencies short term contracts etc. If you need to take someone on and you know this.

        • JimF
          Posted May 22, 2012 at 9:40 pm | Permalink

          Why do you want a workforce of half-trained half-motivated people?

          • Bazman
            Posted May 26, 2012 at 7:54 am | Permalink

            When a company has this it is able to hire and fire at will with the advantage of having many employees tell them to ram it along with their low wages. This enables a company to try to find ‘magic bullets’ in the form of desperate but often motivated people such as East Europeans and certain other types of individuals who could be trained up by a few skilled workers to carry out such tasks as maintenance of equipment. Particularity if this equipment is dated. It ain’t rocket science. The Immigrants often use this type of employments to get a foothold in the country and then leave and the less skilled ones are just used and told how lucky they are to have a job. If a union is involved then wages are far higher and the job is rubbish but reasonably well paid as long as you are not a temp employed through an agency.

        • A Different Simon
          Posted May 22, 2012 at 10:55 pm | Permalink

          In the companies I’ve done work for it’s never been “them and us” .

          When the second company went down the directors lost their houses . Bit different from losing a months wages isn’ t it .

          In the real world you don’t know what’s around the next corner .

          Many opportunities are only transient .

          Better to create 3 years work for 20 people than not to create it at all .

    • A Different Simon
      Posted May 22, 2012 at 8:36 am | Permalink

      Greg ,

      I don’t know whether you are the proprietor of a company or not . I’m not so it doesn’t matter what I think – only what proprietors of companies think .

      Those people I know who are proprietors of small companies and are patriotic and want to create employment are scared to take people on .

      These are not paranoid people . They are ordinary people but with more gumption than most .

      Companies are advised to have a solicitor in the room when conducting interviews . One slip such as asking “how are you today” and receiving a response that the applicant has a health condition may lead to allegations of discrimination if that person does not get the job .

      Thus the equality law ensures absolute equality ; that the job is never created in the first place and nobody can get it .

      Most small companies can barely pay the bills never mind afford the overheads of an H.R. manager .

      I’ve been made redundant 3 times and still do not think companies should be required to give a reason for parting company with an employee , even after the probationary period .

      Employment legislation is famously useless . The only thing which makes the lot of employees better is lower unemployment turning the market from an employers into an employees market .

      Greg , do you think easy-hire is desireable and if so do you think you can have it without also having easy-fire ?

      • lifelogic
        Posted May 22, 2012 at 10:58 am | Permalink


      • Bazman
        Posted May 22, 2012 at 5:12 pm | Permalink

        Producing revolving door recruitment policies in many companies as well as fear and ‘ram it’ attitudes from the ones in the workforce workforce who are not afraid.

        • A Different Simon
          Posted May 22, 2012 at 10:48 pm | Permalink

          The only job security is being able to get another job .

          The only assurance of decent treatment of employees is close to full employment .

          Do you dispute this Bazman ?

          • lifelogic
            Posted May 23, 2012 at 8:37 am | Permalink


          • Bazman
            Posted May 23, 2012 at 5:49 pm | Permalink

            You assume their can be more cleaning jobs than cleaners within a commutable location. Leading to competition of employers for cleaners. Fantasy. This is why employment rights are needed.

    • Single Acts
      Posted May 22, 2012 at 8:44 am | Permalink

      And speaking for myself and almost everyone else I speak to at our local enterprise events, I can confirm this.

    • Leslie Singleton
      Posted May 22, 2012 at 9:38 am | Permalink

      It’s not just “performing badly”. In a small, perhaps recently started, business the boss has to get on well with his employees and, if he doesn’t, must be able to let go those that cannot get on with him. People do not always rub along well together, that’s life. The boss has other things to do than worry about the plethora of prolix employment law. The boss of a big company has to run the company not worry about maternity leave etc but at least he has a Personnel (Sorry HR) Department to worry about that for him, which the small start up of course does not have. The new boy needs to concentrate on his new idea and business plan and learn about a host of other matters like Accounting, Tax and VAT. Is it not obvious that many simply are not going to bother? The worst of it is that anyone who knows anything about it is going to be the last one wanting to go in to business himself to face all this ridiculous over-regulation. The Labour Party talking as if these proposals amount to Firing At Will is a complete disgrace. Why don’t they try assisting the (small) man out of work rather than the (big)Unions who have enough clout as it is?

      • A Different Simon
        Posted May 22, 2012 at 11:01 pm | Permalink

        Agreed .

        I don’t know why small employers are treated with such disdain by Govt .

        Perhaps it is because they only understand monoliths .

        As for the self employed , they really are enemies of the state .

    • nicol sinclair
      Posted May 22, 2012 at 2:05 pm | Permalink

      And, as an ex-SME in the hospitality sector, I can vouch for that 100%

      • Mike Stallard
        Posted May 22, 2012 at 4:15 pm | Permalink

        Shame Mr Cable is not a member of the same class of people as the above isn’t it.

        • A Different Simon
          Posted May 22, 2012 at 11:03 pm | Permalink

          I believe Mr Cable is trying to do his best most of the time .

          They all spout rubbish before an election .

          It’s important for the British People that Mr Cable comes through for us .

    • lifelogic
      Posted May 22, 2012 at 3:38 pm | Permalink

      Just put yourself in a position of an employer and think what you would do if you were paying the wages, the potential legal claim, the legal cost and all the distractions from doing your real job and all the rest of the hassle.

    • uanime5
      Posted May 22, 2012 at 6:19 pm | Permalink

      Yet these proponents never seem to know what a temporary contract is or how it will fix their problems.

      • Leslie Singleton
        Posted May 22, 2012 at 11:49 pm | Permalink

        The comment in favour of short term contracts was written I suspect by someone who has never run anything requiring investment in, and very liklely long term borrowing to finance, Fixed Assets. Always the owner comes off second best in their thinking despite the fact that only the owner can provide jobs. The idea of being able to run a business on basis of all or a significant portion of employees being able just to walk out at the end of short term contracts again shows little idea of what has to be involved.

        • uanime5
          Posted May 23, 2012 at 11:51 pm | Permalink

          Short term contracts provide the easy hire and fire employers want, and allows small employers to try out an employee before they hire them full time. If companies want long term staff they should be campaigning for more job security, not less.

      • lifelogic
        Posted May 23, 2012 at 5:42 am | Permalink

        It is not that simple in practice.

  8. Damien
    Posted May 22, 2012 at 7:38 am | Permalink

    No one seems to know the details of this ‘fire at will’ proposal. If it was limited to companies under 10 then it would really help small startups. It was interesting to see Dr Cable doing interviews talking as if the proposal was for larger companies.

    The proposal by Frank Field in the Daily Telegraph yesterday was that there should be a pause in immigration from the EU during the recession and that this would give IDS plans a chance to work. Field gave switzerland as an example where they have introduced a rule requiring EU immigrants to apply BEFORE moving there.

    • lifelogic
      Posted May 22, 2012 at 10:59 am | Permalink

      Why limit it to under ten it would help all companies and even the state sector.

    • Tad Davison
      Posted May 22, 2012 at 11:56 am | Permalink

      I have a lot of respect for Frank Field.


      • Bob
        Posted May 22, 2012 at 2:19 pm | Permalink


        “I have a lot of respect for Frank Field.”

        He’s more conservative than the current Tory leader.

        • Tad Davison
          Posted May 22, 2012 at 8:27 pm | Permalink

          That’s why I respect him Bob.

        • lifelogic
          Posted May 22, 2012 at 8:47 pm | Permalink

          Most people are – are they not? Cameron is clearly a pro EU, big state, fake green, socialist when judged on his actions.

          • APL
            Posted May 24, 2012 at 6:48 am | Permalink

            lifelogic: ” Cameron is clearly a … fake green ..”

            Some mishtake surely?

            He is fake Tory.

        • lifelogic
          Posted May 23, 2012 at 5:44 am | Permalink

          So is about 75% of the population – in the sense of wanting less tax borrow and waste government at all levels.

    • Mactheknife
      Posted May 22, 2012 at 2:33 pm | Permalink

      Didn’t Spain (?) get some special dispensation to stop immigrants from new EU countries moving there during their earlier recession ? I seem to recall something about this around 12 months ago. I’m probably wrong though.

  9. Denis Cooper
    Posted May 22, 2012 at 7:43 am | Permalink

    “… and much is mandated by EU law, making it impossible for Parliament to change it without a new relationship with the EU being established first.”

    Not so; the Parliament of which JR is a member is a sovereign legislature, the supreme legal authority for the United Kingdom, and if Parliament expressly legislates against any EU law, making it clear to the UK courts that the breach of EU law is intentional and not adventitious, then the UK courts will follow the new will of Parliament.

    What is impossible, in theory, is for the UK government to act against EU law without first receiving Parliamentary authorisation to do so, notwithstanding its European Communities Act 1972.

    But that’s only in theory, unless Parliament insists on its rights under the constitution, rights established in 1688 through the first two clauses of the Bill of Rights, which is still on the statute book:

    “And thereupon the said Lords Spirituall and Temporall and Commons … Doe in the first place … Declare

    Dispensing Power.

    That the pretended Power of Suspending of Laws or the Execution of Laws by Regall Authority without Consent of Parlyament is illegall.

    Late dispensing Power.

    That the pretended Power of Dispensing with Laws or the Execution of Laws by Regall Authoritie as it hath beene assumed and exercised of late is illegall.”

    • Tad Davison
      Posted May 22, 2012 at 12:05 pm | Permalink

      Good and interesting post Denis, so can we challenge a lot of the illegalities of our membership of the EU, and possibly get them overturned?


      • Denis Cooper
        Posted May 22, 2012 at 6:24 pm | Permalink

        In theory, if we’re prepared to risk a lot of money on a case with only a slim prospect of success. By raising funds to fight their case the Metric Martyrs did achieve something important in that way, albeit less than they’d hoped.

        Or, we could ask our MPs to sort it out …

    • uanime5
      Posted May 22, 2012 at 6:24 pm | Permalink

      This has no chance of working as the European Court will prosecute the UK for not obeying EU law.

      Also the courts won’t disobey EU law as long as Parliament wishes to be part of the EU and obeying EU law is a requirement for being the EU. The UK cannot be part of the EU and breach the rules of EU membership.

      • Denis Cooper
        Posted May 23, 2012 at 8:59 am | Permalink

        On the domestic plane the UK courts will follow the clearly expressed will of Parliament, even if that runs against EU law. They understand that the latter has no force in this country other than that granted by Parliament, and if Parliament chooses to withdraw that grant in part or in its entirety then the courts will not attempt to gainsay that.

        What the ECJ would or would not attempt to do on the international plane is an entirely different matter. But while the EU treaties give it the power to impose fines for infringements of the EU treaties and laws it has no means at its disposal to enforce the payment of those fines.

        • uanime5
          Posted May 23, 2012 at 11:48 pm | Permalink

          If Parliament says it doesn’t want the courts to obey EU law but wants the UK to still be part of the EU (one of the requirements of being in the EU is obeying EU law) then Parliament is saying contradictory things. Thus the courts have no clear instruction from Parliament. Consequently they won’t do anything that will cause the UK to be kicked out of the EU and will have to keep obeying EU law until Parliament makes it clear that it wishes to leave the EU.

          Given that the UK gets a large rebate from the EU it is very easy for the ECJ to collect fines by deducting this amount from the rebate.

          • Denis Cooper
            Posted May 25, 2012 at 8:12 am | Permalink

            On that basis the courts would be constantly puzzled into inaction, because it’s commonplace for a later Act to partly contradict an earlier Act.

            In such cases the courts routinely apply the later legislation, not those parts of the original legislation which have been contradicted; as far as the European Communities Act 1972 is concerned the only special requirement is that any repeal must be express rather than implied, so that the courts are clear that Parliament intends to over-ride some aspect of the EU treaties and laws.

            As Bill Cash MP put it in May 2006, Column 753 onwards here:


            “However, all that case law, every one of those burdens and every aspect of that European legislation depend on one thing only – the legislative supremacy of this House in passing the European Communities Act. As a consequence, it is open to our judiciary – as in the different context of the Human Rights Act 1998 – to interpret and apply that law. That is solely, exclusively and entirely because of the European Communities Act passed by this House. If this House decides that it wishes to make changes, by whatever procedure, it is incumbent on the judiciary to give effect to that subsequent inconsistent law, provided it is express and unambiguous. That case law is laid down unequivocally by Lord Denning in the case of McCarthy’s v. Smith, by Lord Justice Laws in the case of the metric martyrs and by Lord Steyn himself in a lecture in 1996.

            There are so many misunderstandings about the role of the judiciary in these matters. So much confusion is created by invoking the principles of Community law when we are dealing with, and must continue to insist on, the principles of United Kingdom constitutional law. From the earliest days of the 17th century, in a constant movement towards the establishment of the democratic Parliament that we have today, that has been dependent on the fact that we legislate and the judges obey. I do not mean that in a derogatory sense; it is what the judges say of their own function.

            I mentioned Lord Steyn. He is well known as a distinguished lawyer, with – I would say – some influence, and with strong views about the European Community. We understand that he is enthusiastic about it. In a lecture that he gave in 1996, however, he made his opinion abundantly clear. He said

            “in countless decisions the courts have declared the unqualified supremacy of Parliament. There are no exceptions.””

            As for your suggestion that if it got to the point of the ECJ attempting to impose fines then they could be deducted from the UK rebate, you seem to forget that the rebate represents the return of part of our own money, and whatever was deducted from the rebate could in turn be deducted from our original contribution.

  10. David
    Posted May 22, 2012 at 7:57 am | Permalink

    I will always remember the opening remarks of the tutor on an IoD “personnel” course I attended: you can get rid of anyone – it just depends on how much you are prepared to pay.

    “Employment protection” law, like most well-intentioned ideas from the left can have a consequence opposite to that wished-for. We wanted to have a grown-up conversation with someone who had to go. The intention was to set up a suitable agreement, including a year’s salary as pay-off. The advice of the lawyers (because compromise agreements, however well written, are very difficult for an employer to defend against at an Employment Tribunal) was to keep an eye out for a health and safety breach. Needless to say, one was found. This person was dismissed for gross misconduct with no payment, and a rather unpleasant taste in everyone’s mouth. Going against the advice of the lawyers was not an option as that would have made the company, rather than the employment protection insurance, liable for the legal bills.

    I can wholeheartedly endorse JR’s point: every employer in a small business (not just sole traders) thinks very carefully indeed before hiring anyone, simply because of the minefield that is the “employment protection” industry. I can relate to that opening remark in personal terms: not doing the decent thing weighs heavy every now and then.

  11. Denis Cooper
    Posted May 22, 2012 at 8:06 am | Permalink

    I’m always in two minds about this kind of thing.

    On the one hand, managers must be allowed to manage their businesses.

    But on the other hand, people should be able to manage their lives.

    Without some degree of confidence about their financial prospects, which in most cases means their prospects for gainful employment, it becomes impossible for them to take sensible decisions about entering into commitments such as marriage, taking on a mortgage, having children.

    It’s unreasonable to expect ordinary people to behave responsibly when the government behaves irresponsibly by creating the conditions for mass unemployment, not least by allowing and encouraging mass immigration.

    • Electro-Kevin
      Posted May 22, 2012 at 6:30 pm | Permalink

      I share your ambivalence, Denis. This is with the greatest respect and admiration to those who create businesses.

      This country has been terribly governed in politics and law and there lies the blame.

    • A Different Simon
      Posted May 22, 2012 at 11:07 pm | Permalink

      There is no degree of confidence at the moment is their Dennis .

      Employment laws can’t provide it either , especially when the employer goes down the pan .

      The only thing that can is a higher rate of employment leading to better opportunities .

  12. Iain
    Posted May 22, 2012 at 8:13 am | Permalink

    In light of the recent stats that showed 166k British people were made redundant while 160k immigrants founds jobs here, making it easier to sack people will just further facilitate employers exchanging their British workforce for an immigrant one.

    • Tad Davison
      Posted May 22, 2012 at 12:14 pm | Permalink

      Facts like that make me fume Iain, and really shows that things have to change. But do we have people of sufficient substance in positions of influence and responsibility who will bring about those changes?

      I think not!


  13. Mike Stallard
    Posted May 22, 2012 at 8:20 am | Permalink

    I have just re read the Bill of Rights (1688) on

    Like the American Constitution, the Bill comes over today as a defence of the replacing of the hated Papist James with William and Mary, both respectable Protestants. All the powers of Parliament are outlined and there doesn’t seem, for some reason, to be any mention of either Mr Rompuy, M Barroso or even America.

    On the other hand, Protestants may have Arms for their Defence suitable to their Conditions and as allowed by Law. Against the Catholics perhaps? Bring back personal weapons?

    It is the same problem facing the Muslims – bringing the Koranic and Haddith teachings into the 21st century……..

  14. woe is me
    Posted May 22, 2012 at 8:21 am | Permalink

    I employed a lady who sued me for £30,000 – successfully! I pay the final installment of £14750 today. (About £20,000 to the lawyers, £10,000 to her).
    A Kafkaesque trail of events led to this – much of it down to the insurance racket we have in the UK. I used to employ people, but now my advice is always – DON’T. And not just because of this experience. Staff take advantage, they let you down, they cost twice as much as their hourly rate and they can sue you til the cows come home, without penalty.
    wow woe woe is me

    • lifelogic
      Posted May 22, 2012 at 11:02 am | Permalink

      Indeed not in the interest of anyone other than lawyers.

    • Bazman
      Posted May 22, 2012 at 5:13 pm | Permalink

      Makes you wonder what the judge agreed with..

      • Electro-Kevin
        Posted May 22, 2012 at 6:42 pm | Permalink

        My wife is a systems analyst by profession with a degree. She’s underemployed as a secretary for a small engineering firm – the hours and locality fit with family commitments. Her skills enable her to trouble-shoot computer problems (critical as there work is largely CAD based) which she does without complaint. She used to work on SAP as a consultant and earned a very good salary.

        She’s had two pay rises in six years despite yearly increases in professional fees to clients.

        “You’re lucky to have a job” seems to be the attitude. They wouldn’t have even noticed an index linked increase on her wages which aren’t that far above minimum.

        Despite my respect for them employers aren’t always fair. In fact they can be bloody tight.

        • Electro-Kevin
          Posted May 23, 2012 at 6:54 am | Permalink

          My point being that working appears to be optional around these parts. A dutiful and capable employee such as my wife doesn’t get much respect as it is.

        • Bazman
          Posted May 23, 2012 at 5:53 pm | Permalink

          Why does she do this work for no pay? Does the company look after the interests of starving children? I expect not. No pay no work. What do you not understand about that contract. You do not get professional services for the wages of a secretary. Does the boss work for these wages. Tell them to ram it or if you are smarter than me don’t talk about it, just don’t do it.

      • lifelogic
        Posted May 22, 2012 at 8:52 pm | Permalink

        One assumes the current laws as mad as they are and the need to keep lots of litigants coming to court – in order to keep the court/legal industry on the road.

      • woe is me
        Posted May 23, 2012 at 3:57 pm | Permalink

        There was no judge. You are ‘encouraged’ to settle as going to court can easily bankrupt you – especially in a ‘my word against yours’ battle. But the tone you have adopted is quite common – people often assume that because you have to pay out, you must be guilty.

  15. Kenneth
    Posted May 22, 2012 at 8:56 am | Permalink

    My understanding of Vince Cable’s argument is that making it easier to sack poor performing staff would create fear amongst the workforce.

    If employers are worried that their staff will be so frightened that it would impair their work then surely they will ask the government not to pursue this idea. On the other hand employers may say that having a better workforce will allow them to create more businesses and therefore more jobs and wealth.

    For Vince Cable to be judge and jury over this is wrong when all he needs to do is consult businesses directly.

    • uanime5
      Posted May 22, 2012 at 6:29 pm | Permalink

      Why is Vince Cable only asking businesses? Surely the employees should also be consulted as they will bear the burnt of this decision.

      Also being able to easily fire staff won’t create a better workforce, it will just create a workforce that is easier to bully.

      • Kenneth
        Posted May 23, 2012 at 8:32 am | Permalink

        You may be right: it may not create a better workforce, in which case businesses would agree with Mr Cable.

        Beecroft is one of the few people standing up for the unemployed.

        • uanime5
          Posted May 23, 2012 at 11:31 pm | Permalink

          Beecroft isn’t standing up for the unemployed. If he was he would be convincing the Government to retrain the unemployed so they can get new jobs, rather than creating more unemployment by making it easier to fire employees.

      • lifelogic
        Posted May 23, 2012 at 8:40 am | Permalink

        Why on earth does he need to ask? Of course businesses want easy hire and fire. What is in the interest of business is also in general in the interests of employees in the long run anyway – more jobs to choose from.

        • Bazman
          Posted May 23, 2012 at 5:55 pm | Permalink

          The implication that more desperate unemployed could take their place and work harder for less? Oh really.

        • Bazman
          Posted May 23, 2012 at 5:59 pm | Permalink

          Less jobs from what I have seen. The employers will just flog more work out of the existing staff and more ‘voluntary’ overtime. The idea of business is the employ the least amount of people. More are employed as a last resort say many business people. More work, but not from you, this is why you like the idea.

        • uanime5
          Posted May 23, 2012 at 11:33 pm | Permalink

          Making it easier to fire people is never in the interest of the employees because it removes their job security. It also won’t provide more jobs if employers try to reduce their overheads by firing their employees.

  16. English Pensioner
    Posted May 22, 2012 at 9:00 am | Permalink

    I know of a couple who run a small family business, husband, wife, son and a couple of employees.
    The wife reckons that she spends about four days a week reading paperwork and filling in forms which emanate from government departments/local council/quangos. Most do not apply to the business, but if she misses anything there is the possibility of huge fines.
    This is a huge overhead for a small business and one they can ill-afford.

    Presumably this is what the government has in mind when it “creates jobs”.

    • lifelogic
      Posted May 22, 2012 at 3:41 pm | Permalink

      Indeed how can you run a business when all you time is taken up with this endless nonsense from the state.

      • Bazman
        Posted May 22, 2012 at 7:29 pm | Permalink

        My boss does little nonsense from the state as I see. I see him work everyday. He employs a management company to take care of the detail and concentrates on orders and ‘ram it’. From customers and employees. Has done for years by recent conversations. Ram it..

        • lifelogic
          Posted May 24, 2012 at 9:06 am | Permalink

          If he does it through a management company or himself it is still a burden on the business for all the workers to carry and clearly reduces growth and new employment.

          • Bazman
            Posted May 24, 2012 at 5:19 pm | Permalink

            He just took on a contract cleaner for a few hours a week for the canteen and the office today who came around the estate soliciting for work. What you are proposing is to allow him to pay cash in hand on a daily basis to the workforce. Which with some he pays on a daily self employed rate, all legal. This is what this type of employee wants as they do other work for other employers/customers. Ideally they would work full time reducing his costs and be more available. Were he to pay cash then this would open up many problems and he could not claim back on the business. You are living in a simplistic business fantasy of no rules, accounts, tax, safety or employment law. No doubt in your kitchen.

  17. Matthew
    Posted May 22, 2012 at 10:06 am | Permalink

    The benefits of labour flexibility are not just that employers will take on people without fear of tribunals and cost if it doesn’t work out.

    It helps to develop world class companies. It’s the lack of such world class companies and products that is the reason why our exports to China India and the growing economies of the Far East is so dismal.
    So many politicians talk about jobs, without discussing why the jobs aren’t there, why the infrastructure isn’t there.

    Jack Welch developed GE by appraising the employees every year and informing the bottom 10% that they needed to improve or look outside GE to their future. Imagine attempting to do this here in the UK? We too often carry “deadwood” workers as it is too difficult to sack them and replace them with higher grade workers.

    How many premiership teams would succeed if they didn’t evolve and put the best people in the team?

    This “grading differentiation” is one of the key advantages to the US economy.

    Too often UK companies have fallen short when faced with US and German competition, this wouldn’t solve everything, but it would help.

    • uanime5
      Posted May 22, 2012 at 6:32 pm | Permalink

      China and India are growing because their employees’ are paid a fraction of the wages of a UK employee.

      Given how flexible UK employment law is this is unlikely to help as large companies can always fire people they don’t want.

      • Susan
        Posted May 23, 2012 at 7:59 am | Permalink


        You are right on this issue, big companies do find ways of being able to get rid of employees they deem are no longer able to contribute in the way they would like. The pressure is there to work long hours and be available whenever necessary. The higher you climb the more call there is on your time and your performance is always subject to review. There is little time for family life, that always has to take second place, no matter what the rule book says. On the same point you do get paid well for this. However this does mean that it is not necessarily the right people that are pushed out the door. An unpopular employee may be very good at his job but unable to communicate effectively with the people around him. This does cause problems but often this can be solved by him/her being taken under the wing of someone in management. A good manager should always be prepared to try this first. Where there is a real problem is with women in the work place who have children or of an age were they will. They are not pulling their weight taking time off for maternity and other. This causes much resentment from others because one person missing from a team for any length of time puts pressure on everybody else. These people are not so easy to get rid of.

        I am ambivalent about this proposed idea of making it is easier to fire unsuitable employees for small companies. On the one hand I do not want to go back to the Victorian days of when employers could just fire employees for no good reason and there was no job security. On the other I do know there are employees who will not keep to the rules of their employment, are often late and are lazy, so it is a difficult one.

    • lifelogic
      Posted May 22, 2012 at 8:55 pm | Permalink


      “How many premiership teams would succeed if they didn’t evolve and put the best people in the team”?

      How many football teams would survive, if they had gender, maternity and disability laws, no retirement laws, no firing laws and all the rest?

      • Bazman
        Posted May 23, 2012 at 6:01 pm | Permalink

        How many companies would survive with premiership financial planning? Massive debts and a billionaire owner. More nonsense from you.

    • A Different Simon
      Posted May 22, 2012 at 11:11 pm | Permalink

      Microsoft used to dispose of the bottom 5% and there was no grace period in which to improve .

      Still think IBM have made a bigger contribution to software and computer science .

  18. Susan
    Posted May 22, 2012 at 10:43 am | Permalink

    I have only worked for large companies so it would be difficult for me to say if the problems for small business are the same. The first problem for the larger companies is in getting skilled workers in the first place. Sometimes these jobs remain unfilled until a foreign born worker can fill the void. Quite often those that do apply tell untruths about their qualitfications or do have them but are still not up to the standard required.

    The biggest complaint seems to be, dare I say it, about female workers who have children already or are of an age when they are likely to begin to have a family. Maternity leave and women expecting time off when their children are ill or for other reasons is a big problem. The load then falls on their other colleagues to fill the gap. In the case of maternity rights the woman is then out of the work place for a long time and returns to work not up to speed with the job but expects the same rights as before. It may be the case though, that someone has stepped into that job and done it better. I am a person who believes in equal rights, providing these rights are truely equal. Single colleagues, those that have no children or males in general should not have to work more hours and provide cover for those that choose to have children. The Government continues to extend these rights and it is costly to companies as well as being unfair to certain workers. Now with this proposed flexible maternity leave it will make life even more difficult if young men are drawn into this as well. Still I suppose it will increase the chance of 50 year old plus workers staying in work and being employed in the first place.

    I think the real problem is that the Government has no understanding about the realities of running a business.

    • uanime5
      Posted May 22, 2012 at 6:36 pm | Permalink

      The first problem can be solved by companies taking the best candidate and training them, rather than expecting someone with all the skills to appear.

      Problems regarding maternity leave are much more difficult to resolve. Unless the Government enables women to become full time mothers women will continue to juggle a job and family life.

      • Susan
        Posted May 23, 2012 at 8:37 am | Permalink


        Uanime5 the skills that are required by employers, especially in large companies, cannot be just achieved by training them. Employees must have the background of education which provides these skills. There is not the time either. Unfortunately a lot of young people now, do not even have the basics in education to build on. The work force is getting much older as the skills required by employers is not available amongst young British people.

        Couples who want children must first of all ask if they can afford it if one of them has to give up work. Or how they will juggle their working life to accommodate it if they both to remain at work. It is not up to Government to insist that business people take the burden for those who choose to have children. It is very unfair to those employees who have to pick up the work for these women who are missing.

        • Bazman
          Posted May 23, 2012 at 6:03 pm | Permalink

          Children only for those who can afford them? Not only do you have to be poor you also cannot have children?

        • Anon
          Posted May 23, 2012 at 7:20 pm | Permalink

          Two salaries are necessary to survive in this economy. The logical consequence of your argument is that many couples wouldn’t be able to have children at all if that meant loss of one salary. This would lower the birth rate and lead to dire demographic consequences over time. Thankfully, Government governs for society as a whole, rather than the narrow view of some employers whom you appear to speak for.

          • Susan
            Posted May 25, 2012 at 6:42 am | Permalink

            Bazman and Anon

            People can have as many children as they like providing they are prepared to take responsibility for them. The Government cannot expect companies or business to have to take the burden for those who take extended time off for maternity and other needs of their children. This is also unfair to their colleagues who have to pick up that work when they are missing.

            Anon it is not a narrow view there is much resentment going on in the work place over this issue.

            Bazman being poor is not an excuse, my Mother and Father were very poor as you would see it. They both worked and had four children to provide for. They juggled work so that neither took time off. When we were young my Father worked days and my Mother worked nights.

            People need to take responsibility for themselves not expect businesses and the State to do it for them.

        • uanime5
          Posted May 23, 2012 at 11:28 pm | Permalink

          If young British people lack the education or skills then companies need to invest a lot of time in training them, even if it means paying them to go to university. A good example is National Grid offers 2 years of training and education to all graduates to ensure their engineers have all the skills they need. Doing nothing won’t magically give employees the skills they need.

          If parent’s followed you advise only the unemployed and very wealthy would be able to have children. Allowing businesses to fire women for being having children isn’t the answer.

          • Susan
            Posted May 25, 2012 at 6:22 am | Permalink


            I have already answered you on the lack of skills issue. Asking the same question will not produce a different answer. State education will have to improve to give young people at least the basics to be able to take a job. Private companies cannot afford the time or the cost to educate the young to the standard required.

  19. Alte Fritz
    Posted May 22, 2012 at 12:02 pm | Permalink

    Listening to extracts from yesterday’s debate, the noises coming from the left were that the potential reforms were yet something else which would make workers feel vulnerable. That view is invariably predicated on the belief that the employer is predatory, wrong and well resourced.

    This is another indicator of the poverty which infects political debate. Employment legislation has very marginal benefits for employees and significant costs to employers. That is because good employees need not fear for their jobs unless the business is failing anyway, in which case the legal protection is nugatory.

    • uanime5
      Posted May 22, 2012 at 6:38 pm | Permalink

      The benefit of employment law to the employees is far greater than the detriment to the employer, as it protects employees from bad employers. Good employers need not fear being sued.

      • lifelogic
        Posted May 24, 2012 at 9:09 am | Permalink

        “Good employers need not fear being sued” what a load of c******.

        The best protection and (only really effective one) is for employees is more jobs available to them.

  20. Bob
    Posted May 22, 2012 at 12:20 pm | Permalink

    Andrew Neil does more to expose socialist spin than any of the Tories.
    scroll in to 3:52
    – priceless!

    I can’t believe the BBC allow him to get away with it.
    Maybe they’re afraid that he would go to Sky and do even more damage to Labour.

    • Tad Davison
      Posted May 22, 2012 at 8:32 pm | Permalink

      Thanks for the link. I just wish there were more like him. When politicians talk sweetbreads, he isn’t afraid to hold them to account.


    • A Different Simon
      Posted May 23, 2012 at 12:15 am | Permalink

      I almost wet my pants from 4:30 onwards .

      Andrew Neil is a treasure .

  21. NevermindtheMolluscs
    Posted May 22, 2012 at 12:24 pm | Permalink

    Dear John
    You are so right about the lonely entrepreneurs. I wish I could take the risk to employ someone but I daren’t. The experiences of friends have put me right off- these include feeling they had to employ a disabled person to deliver their free magazine who then used a buggy that could not cope with the terrain then had a flat battery , employing a young woman who promptly fell pregnant and demanded maternity leave then flexible employment which meant that she was useless to her employer, employing an ex LA employee with a work ethic that did not match the pace of the private sector. And I could go on. I would not take the risk- all employment legislation is stacked up in favour of the employee

    • Mactheknife
      Posted May 22, 2012 at 2:45 pm | Permalink

      A friend of mine looked to employ a disabled person but his office facilities weren’t really equipt. Being a genuine guy he asked a disabled charity for advice on making the premises suitable (ie stair lifts, toilets etc). A builder quoted him about £20K for the office modifications. He couldn’t afford it so didn’t offer the job to the disabled person. Two months later the charity guy is back in touch asking how things are. My friend tells him the full story. Charity man goes beserk on the phone threatening all sorts of legal ramifications against my friends “discrimination” . All eventually blew over but only when my friend started to make legal threats of his own about “harassment” etc. Tragic, but a lesson learned was his comment to me.

    • lifelogic
      Posted May 22, 2012 at 3:43 pm | Permalink

      Exactly other than people do not “fall” pregnant.

    • uanime5
      Posted May 22, 2012 at 11:16 pm | Permalink

      I doubt that making it easier to fire people will help small businesses that make bad hiring choices. Why should the employee be punished for the employers’ bad judgement?

      • lifelogic
        Posted May 24, 2012 at 9:12 am | Permalink

        You cannot really judge for sure at interview and people change anyway, become alcoholics, can’t be bothered ………………

    • Bazman
      Posted May 23, 2012 at 9:24 pm | Permalink

      Where these employees employed through agencies by any chance? I suspect they were and he got what he paid for. Your friend tells only half the story. A lack of commitment was reciprocated by the employees. Agencies are a waste of time for everybody despite their smooth talking.

  22. Phil A. Grey
    Posted May 22, 2012 at 12:35 pm | Permalink

    “Perhaps too much employment law and too big a penalty if you get the hiring wrong does keep more people on the dole and mean more businesses never grow beyond sole traders.”

    Mr Redwood. Many buinesses remain as sole traders simply because they can and will from time to time employ the temporary services of someone from the black economy. It is very difficult to police, but these casual temporary employees (typically in the building, plumbing and landscaping services fields), can be ‘hired and fired’ at 24 hrs notice, no questions asked. And they cn still sign on for JS Allowance.

  23. MajorFrustration
    Posted May 22, 2012 at 1:24 pm | Permalink

    This report seems like yet another diversion to cover a lack of ideas. Save us from “we will make touch decsions” “we will rduce the deficit” and “we will do anything to stimulate growth” Yet despite QE of 350/375billion we have increasing inflation, higher interest rate and declining purchasing power. This crowd just do not have a clue. The only way to save any creditability is to go to the country – setting out a “state of the nation” balance sheet and the measures proposed to get into balance and a ref on the EU. Its time to dump firends like Nick and Vince

  24. Bert Young
    Posted May 22, 2012 at 1:51 pm | Permalink

    Dr. JR , you are right to mention the Banks position . It will be no good introducing a relaxation in the employment conditions for small businesses if they are still restricted from borrowing . Banks are still restructuring their balance sheets . Small companies do not irresponsibly sack people ; it would be a bad example to the others they employ and wish to retain ! Large organisations face the same problem . Employment law is far too restrictive and a substantial impediment in a buoyant economy – a drastic overhaul is required .

  25. Bert Young
    Posted May 22, 2012 at 1:55 pm | Permalink

    I am still not receiving your blog until the afternoon . Today it was 1.30 p.m.

    • Tad Davison
      Posted May 22, 2012 at 8:37 pm | Permalink

      Mine too Bert, but I visit the website early.


  26. Lindsay McDougall
    Posted May 22, 2012 at 1:56 pm | Permalink

    The Redundancy Payments Act was introduced in the 1970s, as a ‘Social Compact’ between the Government and the Unions. Its disruptive effect was massive, the more so because many employers, under Union pressure, paid more than the minimum.

    Poor British Leyland had thousands of workers that they couldn’t afford to keep and couldn’t afford to sack. Then in early 80s, North Sea oil was discovered and sterling became a hard petro-currency, making exporting very difficult. At the time, BL’s CEO Michael Edwardes made one comment on North Sea oil: “Why don’t they leave the b_o_dy stuff in the ground?” Small wonder they went under.

    I think that we are past such great difficulties. Perhaps now the questions to ask are “What is the average payout and is it affordable?”

  27. Bill
    Posted May 22, 2012 at 2:26 pm | Permalink

    Is this the same Adrian Beecroft who is a Conservative Party Donor ?

    Reply: Yes

    • Alan Wheatley
      Posted May 22, 2012 at 7:31 pm | Permalink

      It is also the same Adrian Beecroft who, according to Vince Cable, is “an asset stripper”. However, as I heard it Dr. Cable only used this derogatory categorisation in relation to those parts of the report he did not approve of, while at the same time considered the work of an “asset stripper” to be admirable for those parts his Department is already implementing!

      Thus shall we judge you, Dr. Cable.

  28. Bob
    Posted May 22, 2012 at 2:33 pm | Permalink

    I know of an employer who recently took on a part time worker.
    He ended up spending an inordinate amount of time on paperwork and admin around holiday pay etc.

    He then offered her more working hours, and she refused on the basis that it would affect her housing benefit entitlement.

    Do you chaps in Westminster know that this is going on?

    • uanime5
      Posted May 22, 2012 at 6:42 pm | Permalink

      They probably do because they make the law regarding house benefit.

    • Gewyne
      Posted May 22, 2012 at 10:52 pm | Permalink

      You can work 16 hrs a week and keep your unemployment benefit and housing benefits, no council tax payments and no income tax as your probably below the personal allowance – you get free dental care and the government will pay your NI contributions so you do not lose out for your pension.

      she would easily lose (fag packet math)

      £3,000 – £,5,000 rent
      £500 – £1,000 council tax
      £100 dental
      £3,380 unemployment benefit

      plus she would start paying tax and NI – so I imagine just to have the same standard of living she would need an extra £12,000-£14,000 – this is not including the extra pay for the hours he would offer. She would also of course have to work longer and have less free time.

      Hardly surprising few people want to work full time, it’s not worth it financially even with tax credits etc (most of which are aimed at families or those with kids, so not much help to single people wanting to work).

      So she would be worse off, so you cannot blame her.

      • Bazman
        Posted May 23, 2012 at 9:13 pm | Permalink

        She could still sign on but unemployment benefit would be deducted pound for pound.

  29. Geoff M
    Posted May 22, 2012 at 4:32 pm | Permalink
  30. Acorn
    Posted May 22, 2012 at 4:34 pm | Permalink

    JR; as you were quite brave yesterday questioning ministers, I need you to keep it up today. It took you three days to moderate the following, and, I understand you might want to bury it as it is off message and you may not agree with it. We need to be open minded in these days of austerity that will lead to stagflation. You have already checked out the links so just press the post button and tell the Whips to poke it where the sun don’t shine.

    “Austerity” and “You can’t spend your way out of debt”, go together and is coalition policy. In the interest of balance JR, there is a school of thought that maintains that if you are the ISSUER of a SOVEREIGN currency, you can. The USERS of a currency – households; private sector firms and local government, have to save; borrow; sell assets and/or work for income to generate LIQUIDITY. The Treasury/ Central Bank that ISSUES the currency has no such constraints; but, they do adopt some voluntary ones for the less economically minded – politicians and financial journalists – to worry about.

    As there was some confused theories in yesterday’s comments, perhaps a read of the following will help. .

    PS. If you are wondering why Merv King has a problem targeting inflation, well back in 2005, he was hanging out with the wrong crowd .

    • Denis Cooper
      Posted May 23, 2012 at 9:30 am | Permalink

      Thanks for that speech by Mervyn King, I must have a read of it.

  31. Atlas
    Posted May 22, 2012 at 4:36 pm | Permalink


    As you said on the Daily Politics – no fire at will. When I think of all the bad managers who seem able to sack good workers yet never get sacked themselves, then I think Beecroft may be looking in the wrong direction for the cause of low efficiency.

  32. Rupert Butler
    Posted May 22, 2012 at 4:54 pm | Permalink

    NevermindtheMolluscs @ May 22, 2012 at 12:24 and English Pensioner @ May 22, 2012 at 09:00 express both parts of the problem for very small businesses. My limited company employs no outsiders because of the procedure and risk they represent.

    As a school governor, where the employment situation is as stable and as professional as could be, I get ample warning of what costs I might incur if I chose differently.

    Of all the traps that await the incautious school employer, the one that worries me most is that of Stress-Related Illness. Insurance companies do not believe in it, as they refuse to pay for such a sickness beyond a month. The employers have little choice but to seem to believe in it and to accept that it trumps any suggestion of incompetence or inappropriate behaviour. An unavoidable refinement is for employer and employee to agree that the stress is not related directly to the employment. After perhaps a year of paying an unearned salary, the employer may (by paying scrupulous attention the HR adviser) regain the services of one whose previous failings may not have been corrected and who has had ample time to forget such trade skills as he/she used to have.

    What chance would a small private employer have to play that game correctly or even, while playing it, to keep his business afloat ?

  33. uanime5
    Posted May 22, 2012 at 6:11 pm | Permalink

    If the purpose of the Beecroft Report is to benefit entrepreneurs then why will it apply to companies with more than 10 employees?

    According to the Daily Telegraph here are a few of the employment rights the Conservatives feel employees should lose:

    • Delaying laws which will force companies to provide pensions for their workers from this autumn. The report states: “It is unclear why introducing from 2012 a measure that will costs employers £6 billion per year, individuals £7 billion per year and government £2 billion per year is sensible in the current economic climate”.

    • A watering down of the so-called “Tupe” rules that mean that a supplier taking over another’s firm’s contract and workers must respect the existing terms of employment for workers. This is a particular issue when private firms take over roles previously conducted by the public sector.

    • Allowing larger firms to make so-called “collective redundancies where more than 100 workers are dismissed with only 30 days notice. This notice period is currently only available for smaller firms, which means that larger firms have to pay people an extra 60 days worth of wages.

    • “Potential employees would be told which regulations the employer had opted out of and would be free not to take the job if they did not wish to. If employers found that they could not recruit because they had opted out of certain regulations then they would generally choose to opt in to them.”

    • Beecroft’s main recommendations was to introduce so-called “compulsory no fault dismissal”. This would allow businesses to dismiss unproductive workers without explanation by simply offering a redundancy payment.

    The Beecroft Report recommends little more than giving employers greater powers to bully their staff, which will only benefit the very wealthy and be detrimental to everyone else. It’s no surprise that the Conservatives have been attacked over this.

    • JimF
      Posted May 22, 2012 at 9:53 pm | Permalink

      Why would these good staff stay if they were being bullied?

      • uanime5
        Posted May 23, 2012 at 11:19 pm | Permalink

        They won’t, that’s the problem. They also won’t be able to do anything to stop the bullying without losing their job.

  34. turnedoutnice
    Posted May 22, 2012 at 6:12 pm | Permalink

    The CAGW scare is being exposed as a big mistake. It comes down to ‘climate science’ claiming 1000s of ‘pyrgeometers’ measures real energy flow to the Earth’s surface. They don’t:

    Claes has got most of it right but the coup de grace comes when you pose two such instruments back to back in zero temperature gradient, net signal = zero. Take one away and the other measures ~350 W/m^2 solely because there’s a shield behind the detector

    It’s a thermometer, not a power meter, an elementary mistake that’s wasted perhaps $50 billion because CO2 climate sensitivity can’t be more than about a tenth of what the IPCC claims. Can we have our money back please?…………….:o

  35. zorro
    Posted May 22, 2012 at 7:33 pm | Permalink

    As you mention, there are a lot of proposals, and the nature of these reports means that only some get actually enacted and there is no guarantee that they are necessarily the right ones.
    The taxation system must be made simpler (including NI) and it must be made simpler to hire and fire whilst still ensuring that there is adequate protection to avoid discrimination. However, I do not think that this is a silver bullet, as more must be done on a macro level to sort out the banks and, if they insist on QE, use it to increase productive capacity or improve infrastructure, and not assist banks in a circular or prop up unnecessary government deficit spending.
    In the long term, we have to look at the German experience as a whole with their education, training, working conditions, and cooperative industrial attitude. This is the only long term solution to our national problems. Easy hire and fire is an option but I don’t think it would work as well in the long term as a solution. People need to have some stake in society, and some certainty to build roots, establish families, and build useful communities.


  36. zorro
    Posted May 22, 2012 at 10:01 pm | Permalink

    Just watched a slightly embarassing appearance (confusing debt/deficit) on Newsnight by the Economic Secretary to the Treasury, Chloe Smith….She seemed very uncomfortable and was not prepared to debate with Rachel Reeves! (Heaven knows why not)….Where do you get them from?


  37. JimF
    Posted May 22, 2012 at 10:01 pm | Permalink

    You have to realise that Labour is anti-business. This follows on from Brown and Blair creating obstacles, complicating and increasing taxes, and increasing uncertainty. They are viscerally against success and small business which is profit-making is the epitomy of success.
    Unfortunately Cameron and Co. have followed on the coat tails of much of this hatred of small employers and success, and until this type of common sense comes along no pot-shots can be taken by Labour.
    Small employers are rightly cautious about employees they take on. I would estimate that employment in companies under 10 people would increase 30% if these ideas were enacted. Without them the risk and hassle isn’t worth it, except in risk-free cases.

  38. Backwoodsman
    Posted May 23, 2012 at 2:48 am | Permalink

    No doubt there is much in the report to recommend it,and this is being obscured by controversy.However ,the fault for this lies with the author and his incautious defendersSuch proposals as faultless dismissal and deregulating child labour are of minimal significance ,certainly set against the firestorm of unease and class conflict which they have set off,and which is damaging potentially to the fabric of social and political stability the most important key to attracting investment and high-end migration,and thus to national recovery.
    The Conservative party to do any good at all,needs to win elections.They will not do it by irritating dogmatic gestures of this kind.Kipling has a line or two which runs: ‘When he whispers this isnt’ fair dealing,My son leave the Saxon alone’.And the Celt one might add.This is not perceived as ‘fair dealing’,and there will be an electoral price to pay for it without distancing and damage control.And the damage will be without any obvious and extensive compensatory gain,except perhaps to Messrs.Clegg and Milliband.

  39. Alan Wheatley
    Posted May 23, 2012 at 2:31 pm | Permalink

    When I heard of this report being subjected to substantial revision (twenty-seven?) I wonder how much of it was Beecroft. Reading the Daily Telegraph it seems what has come out under his name has not been approved by him, which may well account for him now going public.

  40. Bazman
    Posted May 23, 2012 at 6:25 pm | Permalink

    Basically what Beecroft is saying is that the workforce cannot be trusted and will turn on their employers at any time and for any reason using the law to get their own way. The only way to prevent this happening is to reverse a hundred years of employment rights in this way the employee will have to show more respect or be fired and replaced with a more desperate or weaker person. This in the main will only apply to desperate people at the lower and of the scale or the older ones with with less chance of employment and some right n the form or a payment from their employer because of service given. Maybe he should also make financial discloser of all debts and the number of children compulsory before employment commences in order to select the most ‘committed’ worker and the ones least likely to tell employers to ram it before they are sacked. The disadvantage to employers is that due to their own greed and stupidity of which they like employees need protecting from, will be seeing their employees and interviewees driving of on their cars without saying anything. They will then have to choose from the bottom and bleat about not being able to get the staff. If you think anyone just sacked on the spot for no reason is going to be civil about it then think again. Revenge is a good enough motive. Not every industry employees Chaps and Gels.
    The days of The Ragged Trousered Philanthropists are over..

  • About John Redwood

    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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