The CBI, Britain's big business lobby group, tells its members to pay their workers more

Fee and KJ predict what will happen next...

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Liebrary - Beecroft Report claims sacking people in the UK is too difficult. But the OECD says we are already nearly the most easily fired of all people in the developed world.

 

It is well known that if you say something with sufficient confidence people will believe you. Facts become unimportant so long as they remain hidden. And you don't get to be a top politician or businessman by letting facts get in the way of your opinions and interests.

The Beecroft Report, written for the UK government by the venture capitalist Adrian Beecroft (whose investments include wonga.com, offering 4,000% payday loans to the hard-up), was completed in October 2011 and kept under wraps until it was leaked to the Daily Telegraph newspaper in May 2012. 

One of his recommendations is that “no fault dismissal” should be introduced into employment law. Beecroft strongly favours an “approach which allows an employer to dismiss anyone without giving a reason provided they make an enhanced leaving payment.” Beecroft goes on to say this approach would

“produce an instant improvement in performance in a significant part of the national workforce”.

In plain English, he reckons a significant part of the national workforce is slacking and could do with a bit more fear. To be fair, it was a British naval tradition every now and then execute an admiral to encourage the others, as happened to Admiral John Byng in 1757. Firing an occasional worker for no stated reason would surely encourage the others? And of course, those who have been sacked can always apply to wonga.com for a 4,000% loan (or perhaps not, as with no job and no payday would they actually qualify for a payday loan?).

Blathering politicians, sticking doggedly to their principle of ‘ignorance is bliss’, blissfully spout that excessive employment protection is disadvantaging British industry. The OECD, the club of high income countries, produces various economic measures and reports, including an index on employment protection. Far from having excessive protection, UK employment law provides the third weakest employment rights in the OECD’s survey of nations.

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Why isn't the CBI tougher on banks for failing to support small and medium businesses who provide the bulk of UK employment?

Big industry has an inglorious track record of celebrating missed targets, and rewarding the missers with garlands of cash. In its press release the Confederation of British Industry (CBI) celebrated the efforts of the banks missing the Project Merlin targets, which had been agreed with the government for lending to small and medium enterprises (SMEs). The CBI blamed increased regulation for the shortfall. Are they suggesting that if only banks were less regulated it would be so much better?

When Evan Davis, presenter of Radio 4's Today Programme on 31st August 2011, wondering about the CBI's single minded opposition to changes in bank regulation, suggested to the CBI director general, John Cridland, that he is a paid spokesman for the banks, Cridland responded:

“I am a paid spokesman for business, I’m not a paid spokesman for the banks on their own….There is no division in our membership [on opposing reform at this time]….”

Cridland's claim that there was "no division" among his over 240,000 members on opposing bank reform should be taken liberally salted. "No division" only happens in societies which ignore part of their membership.

So, does the CBI ignore part of its membership?  Small and Medium businesses  employ 58.8% of all private sector workers, and generate 48.8% of all private sector turnover. In spite of their major part in British Industry SMEs only have  10% of the seats reserved in the CBI's Chairmen's Committee  which sets CBI policy, including its approach to banks.

Perhaps this is why the CBI behaves like the golem of the FTSE100, backing gouging financial, energy, and other mega companies regardless of the rip-off effects on even the CBI's own business members let alone us ordinary ripped-off Britons. As Sir Roger Carr, CBI President, said in his article in the Sunday Telegraph, "Let's end the executive greed debate and focus on growth." Oblivious to, or overlooking, the fact that executive greed is one of the greatest drivers of rip-offs that hamstring prosperity and growth for British businesses and for ordinary Britons.

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