Christina Patterson: Fearful people don't spend, and that's a burden as big as red tape

Private sector workers don't understand why it's hard to sack someone in the public sector

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The Independent Online

He sings karaoke. He plays Fruit Ninja. He bashes balls on a tennis court, and watches DVDs. He watches Ugly Betty, and Desperate Housewives, and 24, and Lost. "If there were an Olympic gold medal for chillaxing," said one of his aides recently, our Prime Minister "would win it".

It isn't clear, from a report he published on Monday, whether Fruit Ninja and karaoke are things that improve productivity in the workplace. Adrian Beecroft, who wrote it, doesn't use words like "karaoke". He uses words like "efficient", and "competitive", and "regulation", and "impedes". He uses words like "burden" to say that something is bad, and "flexible" to say it's good. He doesn't use words like "chillax".

The report was commissioned by Steve Hilton, who until he decided to go on a sabbatical in California was a policy adviser to David Cameron. Steve Hilton seems to think that an awful lot of things are a "burden". He thinks, for example, that maternity leave is something that should probably be abolished, and so should consumer rights, and so should quite a lot of the civil service. He thinks clouds should be abolished, or burst with clever technology, and also, maybe, shoes. And he thinks that the best way to cut a deficit, and make an economy grow, is to cut "red tape".

Sometimes, it's quite hard to know what's "red tape" and what isn't. But it seems, from the way people talk about it, that "red tape" is what you call a law you didn't make. It certainly isn't what you call the Finance Bill, for example, which the Government passed in March, and which was the longest finance Bill ever, or the Health and Social Care Bill, which the Government also passed in March, and which runs to more than 470 pages. "Red tape" is a bit like a quango, which is something you say you'll put on a bonfire if someone else started it, but which you'll keep quiet about if the person who started it was you.

So perhaps it's not surprising that the report Hilton commissioned, from a man who made an awful lot of money in something called "venture capital", doesn't seem very keen on "red tape". The report thinks that "equal pay audits", for example, are "time consuming and expensive", and that employers are "frustrated" by the "requirement to advertise jobs".

The original report, which was leaked to a newspaper in October, said that it would be a good idea to postpone plans to introduce "flexible working" for parents, and to drop plans to introduce "flexible working" for workers who might not be parents, and to ditch laws that stopped children from being employed. The final report, which was a little bit different, didn't talk about these things, which may or may not be because "parents" tends to mean mothers, and because David Cameron was worried about getting votes from women. But the final report did make it very, very clear that it wasn't employers who should be "flexible", but employees. "Many regulations," says the report, "are designed to make employment more attractive to potential employees. That, it says, though it doesn't really need to, "was addressing yesterday's problem". That, it makes clear, is for the Fruit Ninja, or the Angry Birds. Today's problem, it makes clear, is workers who aren't quite grateful enough for their jobs, and who make a fuss about their rights.

Today's problem, according to the report, is that when employers want to sack employees, they can't just tell them to go. They have to go through procedures, and maybe even an expensive meeting called a "tribunal", to see if the sacking can count as "constructive dismissal". This, says the report, is very boring for the employers, and a big reason they might not take a worker on. And so, it suggests, it would be a good idea to have a new kind of sacking called "compensated no fault dismissal", where you could just give the employee some money, and make him go. It would, says the report, be "sad" for the people who lost their jobs just because their employer "did not like them", but this would be "a price worth paying" for "all the benefits that would result".

But when the news of this came out, quite a few people thought the price was a little bit high. Labour's shadow Business Secretary, Chuka Umanna, certainly didn't think it was a price worth paying. Even the real Business Secretary, Vince Cable, didn't. Britain, he said on Monday, "has already got a very flexible, co-operative labour force". We didn't, he said, "need to scare the wits out of workers with threats to dismiss them".

Perhaps Cable had read the new report by the mental health charity, Mind, which says that the recession has "had a devastating effect on the wellbeing of British workers". Perhaps he read that seven per cent were taking antidepressants due to stresses at work, and 10 per cent had gone to see their GP. Perhaps he'd heard that 28 per cent were having to work longer hours, and that 33 per cent were now having to compete with colleagues. Perhaps he'd also seen the international league tables which show that many of the countries with the highest levels of employment regulation also have the best economic performance. And he will, unless he's as chillaxed as his boss, have seen the survey his department carried out last year which showed that only 7 per cent of businesses thought that regulation was a barrier to growth.

But Cable would certainly be aware, as everyone in this country must be aware, that the vast majority of the workers who are already "scared out of their wits" about losing their jobs are in the private sector. Some people in the public sector are worried, too, because of what used to be called "cuts" and are now called "savings", but an awful lot of people in the public sector seem to be very worried about quite small changes to their working practices, or to their generous pensions. The police, for example, are worried that they might have to take an annual fitness test. They seem to think that it's very unfair that people who are meant to be chasing criminals should have to be able to run.

What many people in the private sector are feeling isn't a bit of anxiety about a quite easy annual test, or about the size of their pension, which they very often haven't got. What people in the private sector are feeling is raw fear. They don't understand why it seems to be very hard to sack someone in the public sector, but very easy in the private sector, and they sure as hell don't need it to get easier still.

They also want to pass on a message. They want to remind the people who are trying to cut "red tape" that people who are terrified don't spend money. Which isn't great for the economy. They're also miserable, which isn't great for anything else.