The Beecroft report has finally been published, both in its original form, as leaked to the Telegraph, and in its final official form. (Hat Tip to Signal for the links.) And what an anti-climax it is! Sure, many managers will read it and find things that they agree with. After all, most of us have our employment law pet-hates. Some will applaud the proposed cap on compensation for loss of earnings in discrimination cases, others will cheer the suggestion that TUPE protection of terms and conditions should only last for a year. The report contains all sorts of interesting ideas, though I’m not sure how workable some of them are. Doubtless someone better qualified than I am will give it a proper line-by-line fisking in due course.
But, while there are plenty of suggestions in the report, it is short on data. Beecroft provides no solid evidence to show that, even if the report were to be implemented in full, it would make any difference to Britain’s flatlining economy.
I’ve done it to death on this blog but, to recap:
- The UK has one of the lowest levels of employment regulation in the developed world;
- A lot of countries with higher levels of employment regulation than the UK have higher growth, better employment rates and are more competitive;
- Where regulation is already low, cutting it further makes very little difference to employment levels and might even make things worse.
The Beecroft report doesn’t attempt to answer any of these objections. It contains no data at all. As Conservative MP John Redwood found, when he asked his question in Parliament yesterday, the government hasn’t even a rough idea of the likely impact of the report’s implementation.
Mr Redwood, usually thought of as one of the more right-wing MPs, doesn’t think it will make much difference:
I asked how much extra GDP we might get from the full Beecroft. The government said it did not know. I suspect it would be mildly positive, but it is unlikely to be the game changer that tips us into fast growth on its own.
Even “mildly positive” is probably an over-estimate, based more on faith than any empirical evidence.
The OECD has concluded:
There appears to be little or no association between employment protection legislation strictness and overall unemployment.
Even the government’s own call for evidence on the likely impact on micro-businesses is inconclusive. The advocates of further labour market deregulation have, so far, failed to come up with any justification for scrapping existing laws.
Really, the Beecroft report is simply a list of all the employment laws that Adrian Beecroft and the people he talked to don’t like. Nothing more. It’s classic Politics of I Met A Man – long on opinion and anecdote, short on data and analysis. My mates and I reckon all this stuff is a load of crap and we know because we’re business celebs. There’s more of the same in his Telegraph interview today.
Much as the pet-hates and gripes of a few business people might make interesting reading, it is no basis for making policy. Whatever the level of regulation, business people always moan about red tape. Even if the government implemented every measure in Adrian Beecroft’s report, the regulation-haters would still be whinging and the economy would still be screwed.
As you might expect from what is actually little more than a polemic, the Beecroft Report contains a few amusing quotes. This one, for example:
The downside of the proposal is that some people would be dismissed simply because their employer did not like them. While this is sad I believe it is a price worth paying for all the benefits that would result from the change.
All what benefits? Before I decide whether or not a price is worth paying I like to know what I’m going to get. I looked inside Dr Beecroft’s medicine chest and I didn’t find much more than a few quack remedies.
Flip Chart Fairy Tales 
Pingback: The Beecroft report – Snake Oil, Doctor Good and other quack remedies - Rick - Member Blogs - HR Blogs - HR Space from Personnel Today and Xpert HR
Better to say “hire at will” than “fire at will” even though they may mean the same thing. It is not the short-term ease or long-term commitment of employment that has caused our flat-lined economy.
I guess our government will need another expert besides Christine Lagarde to determine why our economy lacks customers.
Meanwhile we should invest in the competence of the unemployed and unemployable to ensure we are not short of eager new employees who are able and willing to work to fulfill the needs of the new and returning customers.
Re unfair dismissal, the underlying problem is that the current regulations assume that all businesses follow best practice, such as contracts that define job performance criteria and appraisals that are regular and substantive. When this is the case, termination for under-performance is usually straightforward.
In reality, many businesses (particularly SMEs) pay lip service to this. Even when top management mandate it, line management often skimps in practice. The onerous burden they are really complaining about is the need to properly performance manage staff. Crap management is not the key to growth.
Beecroft’s proposal on checking eligibility for work is interesting. The current regulation amounts to asking an employee to provide a copy of their passport or work permit when they sign their contract. It really isn’t much of a burden, assuming your business has some basic clerical competence. The report suggests this check should become the responsibility of the UK Border Agency. In other words, increase the role of the state. This shows that the report is opportunistic, rather than ideologically coherent.
A radical idea, I know, but why not scrap the employment contract altogether so that all workers become self-employed?. Organisations could then charge these workers rent for office/ factory space and for the equipment they use in production. This way workers would the receive the surplus value they generate, which is currently expropriated by their employers as profit.
No more employment tribunals. A shorter working week. More work to go round. More opportunities. Better distribution of income. I wonder whether the bosses will endorse it? LOL
Because, in most organizations, the value results from the system and it’s processes to which each employee inputs his and her competence and care through their work.
The system within which they work largely determines their success.
Some builders employ craftspeople as “labor-only subcontractors” but they and their interfaces require a lot of expensive supervision.
So why can’t all workers be self-employed?
The many resulting independent self-employment contracts would get in the way of the cooperation necessary for the organization’s processes to add value while preventing loss.
Also the loss of effective continual improvement processes would eventually put the organization out of business.
Some of the regulation is excessive and deplorable, I agree. But abolishing it will not produce growth or increase employment levels. It is fanciful to think it would and propagandist to put it about that it would.
To be frank, if people in business object so much to the tasks they have to perform in the course of running their businesses then really they should not be in business. There’s no such thing as a free lunch!
I doubt Beecroft’s report will achieve much, but I have a quibble with the claim ‘UK has one of the lowest levels of employment regulation….’. Now as it stands that claim may be true, but what counts is whether or not those regulations can be put into effect at low cost and with not too much effort. For it seems to me that the application of the law in the UK is a very uncertain thing and time consuming and expensive. All you need is to try and fire a p*ss-taker and you will have a bit problem. As they say, the winner in an employment dispute is the person with the best diary and a paper-work arms-race is not a profitable exercise. As for the lawyers, they cannot decide with any certainty whether or not I must sweep snow from my garden path let alone anything else.
Thanks for a very clear summary and comment on the Beecroft report. I now have at least some idea of what it is about and how it fits in with all the other poor decisions that are being made. The word ‘deluded’ comes to mind.
Pingback: Harder, Better, Faster, Stronger « Dr Ian C Elliott
Pingback: Beecroft – Who is Under Performing? « People Performance Potential
Pingback: Slapdash – a damning word? | Freethinking Economist