Lewis James Brown's article on Dominic Raab MP's report 'Escaping the Strait Jacket - Ten regulatory reforms for jobs' has been featured on e-gov monitor.
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Ten Regulatory Reforms That Will Create Jobs
The Centre for Policy Studies recently released ‘Escaping the Strait Jacket’ authored by Dominic Raab MP – a look at ten regulatory reforms that could help to create jobs.
1. Exclude start-ups, micro- and small-businesses from the minimum wage for those under 21; from the extension of flexible working regulations; from requests for time off for training; and from pension auto-entitlement.
2. Introduce no fault dismissal for underperforming employees.
3. Strengthen power of employment tribunals to strike out and deter spurious claims.
4. Install a qualified registrar to pre-vet tribunal claims.
5. Promote greater use of alternative dispute resolution.
6. Promote flexible working for senior employees and manage the Default Retirement Age
7. Require a majority of support from balloted members for any strike in the emergency and transport sectors
8. Reform TUPE to encourage business resues and to promote successful business models
9. Abolish the Agency Workers Regulations 2010.
10. Abolish the Working Time Regulations 1998.
Last week’s figures on employment intention show why the Chancellor needs to consider radical solutions to overcoming “every obstacle in our path to jobs and prosperity”. While deficit reduction is of paramount importance and the Government cannot waiver in its commitment to this (indeed we at the CPS believe that we are not going far enough, and not fast enough), we believe the above ten regulatory reforms would give businesses and entrepreneurs the confidence and opportunity to create jobs.
As the report points out, the businesses community recognises the importance of these issues. In a recent survey, 77% of firms of all sizes identified employment regulation as the leading threat to UK labour market competitiveness.
While recognising the noble intentions of politicians, the report is critical of those who would believe that good intentions can see the laws of economics suspended, that increasing the cost of something will not lead to a fall in supply. The World Economic Forum ranks Britain 83rd on a list of 142 countries when assessing the amount of regulatory burden placed on business. Disregarding the leading lights, this also places us well behind countries with a strong record on employment rights such as Finland, Denmark and New Zealand who all feature in the top 20.
We therefore have to recognise that it is not moral to provide an ever increasing amount of employee benefits and rights while creating the negative recruitment conditions that deny employment opportunities to the millions now seeking them.
Far from negatively impacting those under 21, excluding certain businesses from the minimum wage could help tackle youth unemployment numbers and see many more in work. The experience gained through lower-paid work increases career opportunities and employment skills for someone who may have otherwise been unemployed.
Filtering out and deterring spurious Employment Tribunal claims, encouraging alternative dispute resolution and restoring businesses confidence in letting go unproductive staff likewise will help create the necessary conditions for businesses to increase their recruitment intentions – saving many from the harshness of prolonged unemployment, a cycle that can be hard to break the longer it lasts.
The Agency Workers Regulations 2010, brought in following a change in EU law to protect the rights of temporary workers by giving them access to the same entitlements as full-time staff after 12 weeks will also push up the cost of hiring employees – this time as agency or temp workers. A 2008 survey said an astonishing 73% of firms will reduce or stop using agency workers due to the regulations, thus denying employment to a group who often have family or social reasons for choosing to work this way. Likewise, many who choose to opt-out of the 48-hour week - often under threat by European Parliament votes – do so to support their family or lifestyle.
The measures in the report will help us restore confidence in recruitment, creating jobs and delivering growth in the UK. It is important to remember that what is good for business is also often what is morally right for the socially-conscious.