Keir, have a word love…

I’m not sure I’m buying the government’s rhetoric on being ‘pro-growth’ and ‘pro-business.’ Search though I do for evidence of these claims, I keep coming up empty handed.

The expansion of employment rights — SSP from day one, enhanced flexible working entitlements, unfair dismissal protections at six months — might sound progressive and ‘right-on’ in a Wolfie Smith kind of way … but if you’re interested in productivity (which is the barometer for our strength and survival as a nation) then I suspect you’re already wondering where to build your bunker. Labour productivity in the EEA is +0.9% per hour worked.  Labour productivity in the USA is +6.7% per hour worked.  I’m not advocating for a shift towards the ‘at will’ employment model in America (which comes with downsides of its own) but I am musing out loud on the correlation between ‘employment protection’ and ‘business disruption’. 

If you’re sitting in the MD or FD chair you might, quite rightly, be wondering where new employment rights will leave you in terms of cost burden, administrative complexity and legal exposure.  You may have sucked up the increases last year to NI and National Minimum Wage rates, but it’s equally possible that you are one of the 25% of employers who has made or is intending to make redundancies in response to the cost impact this has had.  Impossible to blame you.  Easy to blame the treasury and the lawmakers.

The burdens employers face are not just financial; they are operational, and hard-hitting for businesses of all shapes and sizes who need to make sense of new policies and procedures that, unless correctly drafted and followed, present tripwires. We are already (i.e. even before the roll-out of new rights from April) witnessing an alarming increase in employees attempting to bring claims against employers on, quite frequently, the most spurious of grounds.  The unholy alliance of ‘the system’ (to include Acas and the tribunals) and ‘the systems’ (i.e TikTok chitter chatter) lures as many opportunists as it does the genuinely hard-done-by into spirals of dispute, disharmony and distress, all neatly masquerading as the worthwhile and entirely due pursuit of financial settlement.  (By the way, the settlement is not an establishment of 'justice'; it's simply the tipping point in one party's ability to not blink first.)

At a critical time in our economic and social history, ignoring the question of improving our productivity is a multi-party failure.  It predates the incumbent government and unless there’s a zeitgeist enlightenment somewhere on the green benches (anywhere on the green benches!) it will succeed the incumbent government.  Nevertheless, the business owner does seem to be perceived as a cruel mill owner, who deserves to be punished. We are not living in the 19th Century; we are living in a time when businesses are competing in a global market and the maintenance of employment (and productivity) in the UK requires government to facilitate employment, not attack it. Employers need a break. They don't need the Fair Work Agency banging on the door like Red Guards on the hunt for 'capitalist' class enemies.  

Who is thinking of the workforce of the future?  AI will certainly replace or augment a number of jobs, but let’s not be catastrophic or luddite in our thinking, imagining that there is no future for our young.  There is a future for our young if we envision it, and we need to see and articulate this vision, and get ahead of AI regulation (and taxation) before we trail still further behind our (erstwhile?) friends across the pond.  Is it a fatalistic determination of the future that is driving our leaders to disempower the young?  Almost one million 16-24 year olds are NEETs (not in education, employment or training).  You can hardly blame them for not being in education when student loans will cripple them (or the tax payer) after graduation.  You can’t be surprised they are not employed when their fancy and expensive degrees haven’t actually qualified them for much at all.  And if there are no real concessions for employers to provide training opportunities then … well, what do you know?  I think it’s time for us to encourage young people to dump the Intersectionality & Post-Colonial Discourse Studies and dive into learning practical skills that will truly make them fit for the future. 

Talking of ‘fit’, dare we mention the ‘fit note’?  Eleven million are issued each year.  Now available to buy online, it only takes a minute to be signed off for a week. It takes a lot longer for an employer to fill a gap that sickness absence leaves and to shuffle resources in order to fulfil the promises they have made to customers.  With the CIPD reporting average sickness rates increasing to around 9 days per employee per year (up from 6 days in 2020) it’s easy to join the dots on our declining productivity rate.  Business owners know better than any politician what it really costs to pay for people who don’t turn up for work.

It’s long past time for our leaders (whichever colour rosette they may wear on the rostrum) to understand that something needs to give.  We’re travelling in the wrong direction and tax policy or legislative change needs to meet the needs of both the employee and the employer.  The protections offered to the former are something of a snare and a delusion.  The burdens placed on the latter are no delusion, but they are certainly a snare. 

I’d like to suggest to those currently at the helm, that if you truly are pro-business and pro-growth you will align the interests of ‘working people’ with the interests of the creators of business and industry (who, by the way, are also ‘working people’).  You will look beyond our shores to see how other countries are gearing up for the future.  And you will get UK plc ready to gear up too.

Ruth Johnson

Director