Leading article: The Chancellor has elected to pick a fight

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In a speech to the Institute of Directors this week, George Osborne took aim at the "costly impact" of Britain's employment regulations. The Chancellor promised that the Government would publish a "wholesale review" of this area of the law. This will apparently look at the unlimited penalties applied to discrimination in employment tribunals and aim to "simplify" the administration of the minimum wage. It will also "review" those regulations that guarantee the existing pay and conditions of workers when their employer is taken over and "reform" the consultation period for collective redundancies. These are all vague words. And it is unclear what the implications will be.

Workplace regulation and legislation should not be sacrosanct. But any reform must take account of what social harm these measures were introduced to address in the first place. The Chancellor's antagonistic tone this week does not offer much hope in this regard.

In his speech, Mr Osborne made no mention of the civilising effects that such regulations have had on workplaces across Britain. Compensation is awarded to those who have experienced gender discrimination in order to deter employers from engaging in this practice. If payments are capped at a low level, firms might calculate that it is easier to pay up, rather than to change their behaviour. The minimum wage, introduced by the last Labour government, has helped to ensure that work pays. Simplification must not mean allowing employers to avoid paying it.

But instead of pledging to safeguard the beneficial effects of these regulations, while making them function more efficiently, the Chancellor decided to pick a fight. He anticipated that pressure groups will rush forward to oppose him. And after a brief mention of workers' rights he demanded: "What about the right to start a business and not be sued out of existence or drowned in paperwork?"

This confrontational language smacks of a Chancellor who, seeing GDP growth falling short, is searching for some red meat to keep the business lobby on-side. It was a speech intended not to serve the joint interests of workers and employers in a civilised workplace, but to set them at each other's throats.

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