Thursday, 27 October 2011

Red tape and workers' rights

Politicians love to talk about abolishing this terrible stuff called ‘red tape’ which clogs up the private and public sectors alike and threatens to bring the entire economy to a complete halt.  They usually claim that just by cutting the stuff out they can solve most of the problems faced by businesses.  Some of them are so enthusiastic that one could almost believe that it’s also the solution to world poverty and hunger.
It’s something which strikes a chord with the general populace as well.  We’re all against unnecessary bureaucracy, but as I’ve mentioned before, defining what is, or is not, unnecessary bureaucracy is a lot harder to do.
One of Cameron’s early acts as PM was to appoint Adrian Beecroft to conduct a review of ‘red tape’ and recommend what could be abolished.  I don’t think that I would have selected a venture capitalist to undertake such a rôle, but I suppose it’s the sort of background likely to produce the sort of report which Cameron wanted.
There have been a number of leaks of some of the things he’s going to recommend over recent weeks, in both the Times and the Telegraph.  Jaxxlanders draws attention to this and this in the Telegraph, and both the newspapers referred to another of his proposals a couple of weeks ago as reported here.
(As a complete aside, Nick Clegg’s claim that ‘for every hour someone in a big company spends on paperwork, it takes nine hours in a smaller firm’ looks to me like one of those politician’s statistics.  It’s simply not credible as a generalisation, and I’d be doubtful if it was even true in a specific instance.  The alarming thing is that he probably believes it – worse still, that it’s an assumption underpinning the adoption of policy.
Peter Black claims this whole issue as another example of how "Liberal Democrats are acting as a bulwark against the worst excesses of the Tory right wing".  That depends on quoting Vince Cable's aides and ignoring the fact that the policy was, according to the Telegraph, launched by a certain Nick Clegg...)
Now, I don’t doubt for one moment that enabling employers to sack anyone who they consider to be underperforming, with no comeback beyond statutory minimum redundancy pay, is something that the worst employers would like.  As Beecroft himself admits, it would also allow some people to “be dismissed simply because their employer doesn’t like them”, something which he describes as “sad” but “a price worth paying”
Creating a climate of fear of unemployment in the workplace may even improve the efficiency of some companies, particularly those whose management is incompetent to start with.  As I’ve suggested previously however, if we want to build successful businesses we should be dealing with the incompetence, not condoning and licensing it.
Nor do I doubt that delaying the introduction of auto-enrolment into a new pension scheme would save companies money.  But it would also leave those who would benefit from auto-enrolment in a worse position at retirement – another ‘price worth paying’ presumably.
It’s all of a piece with the general attitude of the UK Government at present.  There’s a price to be paid for economic recovery, it’s a price worth paying, and it will be paid largely by those at the bottom whilst those at the top continue to reap the extra rewards for introducing ‘greater efficiency’.
But what these proposals are most emphatically not about is reducing unnecessary ’red tape’.  Employee protection is not worthless bureaucracy, and only those who see employees as little more than a costly but sadly necessary resource would ever think that it was.  Such as venture capitalists and the hereditary rich, for instance.
This is an ideologically motivated attack on employee rights, and an attempt to further shift the balance of power away from labour and towards capital.  Others who talk glibly about abolishing red tape should be more careful with their words, and spell out their specifics rather than talk in generalities.  Otherwise, there is a danger that they unintentionally legitimise that attack.


Glyndo said...

"and only those who see employees as little more than a costly but sadly necessary resource"

Always hated the phrase "Human Resource"

Unknown said...

Glyndo - I agree!

Free Market capitalism (which engendered the term HR) has been found to be not just broken, but poisonous!

John - the amount of red tape that is likely to be generated by this initiative will dwarf anything it will save! that is the nature of 'business studies' graduates who are running Britain now.

We desperately need the powers for regulation and standards devolved so that we can configure them appropriately for Wales.

Some chance, eh?

Spirit of BME said...

I am sure you will not be surprised to learn that I take a slightly different view to this issue.
Red Tape has an outcome on the productivity of a company, as all bad regulations are in part job creation for the regulators.
On the 20th October ,this year`s “Doing Business 2012” was published ,its produced year by the International Finance Corporation ( part of the World Bank) and monitors in each country what should be simple for companies to do ,but it stays away from the more complicated trade-off regulations, there some fascinating insights, like -
To enforce a simple contract through a court in Singapore it takes 150 days and in India it takes 1,420 days or to get the grid hooked up to a new warehouse ,in Liberia (on average) 586 days ,Ukraine 274 and Germany 17- guess which country is the most productive?
However, your concern revolved around underperforming staff and how the law protects them. Is the current system abused – of course, companies jump through hoops and fabricate evidence if need be to get the result they want and it all turns into a stressful drawn out circus, where lawyers always win. If these recommendations come into being would they be abused? – Of course, but the mental damage I have seen on employees going through the current process far outweighs the compensation.
If I am on an operating table, I would rather the surgeon have a sharp knife than a blunt axe.

Jaxxlanders said...

Thank you for the mention and for adding a meaningful perspective to plans that will mean a radical diminution of workers rights and which are in danger of being assimilated rather than assessed by the media.

Four ourselves, we remain convinced that Peter Black's post was meant to read "Lib Dems defraud workers rights in government".