Vince Cable is cutting compensation purely to placate certain deep right-wing prejudices
“The problem of growth is that we have a very serious shortage of demand,” said Vince Cable last Sunday, asserting a Keynesian reading of the slump that events are vindicating. He went on to denounce ideologues who seek a solution in cutting what they call red tape – and the rest of us consider rights at work.
“It’s nothing to do with those supply side measures,” he said. Five days is a long time in politics, however, and on Friday the same business secretary signalled that the maximum compensation for unfair dismissal would be slashed.
So what was he thinking? Of course, regulations must balance what is fair and what’s affordable, but cutting the cap will do precious little about costs, since most awards are an order of magnitude less. Cable himself says that Britain’s existing regulations are perfectly compatible with “very flexible labour markets”, which have stopped employment falling as fast as the economy.
But he is cutting compensation – just as he previously barred recent recruits from getting any – purely to placate the deep right-wing prejudices reflected in the evidence-free Beecroft report.
Cable’s defence is that he rejected Beecroft’s plan to allow bosses to fire when there is no fault, but that was hardly a difficult call. Adrian Beecroft himself had conceded that his plans would have the “sad” consequence that “people would be dismissed simply because their employer did not like them”.
The proper response to this dross was not compromise – but to leave workplace rights well alone.
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