Margareta Pagano: Talk about an own goal - Adrian Beecroft's 'fire-at-will' plan is just plain daft
Midweek View: What was meant to be an attempt to boost business and growth with a bonfire of silly, red-tape laws has backfired into a PR fiasco
Margareta Pagano is a former business editor of the Independent on Sunday who now writes columns and business interviews for a range of publications, including the Independent, Independent on Sunday and London Evening Standard.
Wednesday 23 May 2012
What is it with the way government picks its so-called experts to pontificate on big policy decisions? Does it choose these experts by name to match subject?
Take Mary Portas, she could only have been a shopping girl while Sir James Dyson, chosen to report on hi-tech, has an appropriately robotic feel.
Now we have Adrian Beecroft, a name which has a nice Dickensian twist to it and whose multi-leaked proposals for reforming employment law, would – if the critics are to be believed – banish us all to the workhouse.
It hasn't help the Government's case that each time Mr Beecroft is mentioned in the press it's followed by the pejorative description of him being a multi-millionaire venture capitalist – in other words a vulture – and a big Tory donor. Talk about an own-goal.
So, what was meant to be an attempt to boost business and growth with a bonfire of silly, red-tape laws has backfired into a spectacular, PR fiasco for the Government.
Why would you, faced with the greatest fear of unemployment for decades and falling living standards, come up with a proposal to "fire-at-will"? How Mr Cameron must be missing Andy Coulson; the ex-News of the World editor would never have let such a gaffe through to the headlines.
As usual, Vince Cable, the Business Secretary, got it in one when he called the reform "bonkers". It's a shame because Mr Beecroft has come up with around 20 reforms – most of which have been introduced already and many of them are sensible.
But the "compulsory no-fault dismissal" reform, which is supposed to make it easier for firms with fewer than 10 workers to sack under-productive employees, was plain daft.
It's also a costly mistake politically as it's given Mr Cable the opportunity to show again how he's on the side of the workers by declaring that now is not the time to scare them out of their wits with the threat of being "fired at will".
It's been an even sweeter gift to Mr Cable's opposite number, Chuka Umana, who can't have believed his luck to be given so much airtime in the TV studios over an issue which, as he put it, is neither pro nor anti-business, just wrong.
As the ex-employment lawyer also pointed out, in all his years practicing law for small companies he never heard any clamour for reform. Nor have I. When did you last hear of a small businessman or woman say they not taking on extra workers because they can't fire them easily if it doesn't work out? There are masses of other things that do prevent the 3.2 million or so small business bosses from expanding, but it's mainly the lack of skills of potential workers, rising National Insurance (NI), tax, soaring overdraft charges and energy costs that drive them insane.
On the labour front, what you hear most is the cost of funding maternity rights – and now paternity leave – the very issues that No 10 is alleged to have taken out of the report but which do perhaps need addressing.
That's why it was disappointing to hear Simon Walker, head of the Institute of Directors (IoD), and usually pretty shrewd when it comes to fairness, come out in such support for the reform. But Mr Walker insists the current rules are so restrictive that companies are deterred from hiring staff and a no-fault dismissal clause would make it easier for them. If he is correct, then more research should be done before the end of the consultation period.
There are other issues which also need more scrutiny, such as Mr Beecroft's proposal that for redundancies of 20 or more staff, the consultation period should be cut from 90 to 30 days or when a company is in severe difficulties, cut to five days. Another is the proposed crackdown on no-win-no-fee services offered by some lawyers to encourage people to take up litigation to cover employment tribunals as well as reforms of the rights that workers are allowed to "carry" to new employers when their companies are taken over.
But the biggest problem with Mr Beecroft's report is that it misses the point completely. Government should be concentrating on measures like cutting NI and improving bank lending if it wants to encourage confidence and risk-taking, not dragging business back into another 1970s-style bout of Tories bashing the workers.
There's a lesson too: stop appointing experts to carry out such sensitive work – these are issues for parliament.
MPs should be talking direct to the IoD, the Federation of Small Business and the EEF to come up with policy if it wants to know what drives small business to grow – not Shopping Queens. It's lazy politics, and even worse business.
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