Cable rejects unfair dismissal proposals

The Business Secretary says there is "no evidence" to back up claims in Downing Street report leaked

Vince Cable has rejected the suggestion, put forward by Adrian Beecroft, that unfair dismissal laws should be scrapped. As I blogged yesterday, a report by the venture capitalist commissioned by Downing Street claimed that the laws were hindering efficiency and growth by making it too difficult for employers to sack unproductive members of staff. It went so far as to say that this was the "first" problem facing British enterprise.

Asked about the proposals during a speech on growth at the Policy Exchange think-tank, Cable stressed that it was not an official report. He dismissed the central argument:

No evidence has been advanced that I have seen that it will improve labour market flexibility in general, or have any beneficial effect, but if anyone can produce any, we will look at it.

He also added that unemployment has not shot up due to a lack of flexibility in the labour market, and commended the flexibility of business and workers during the recession:

There was a great deal of flexibility shown by our employees as well as the employers. I go round a lot of our industrial plants. The unions have their formal positions, but it is very clear they are committed to their companies and are very flexible about working practices so the world has changed an awful lot in the last 30 years in a positive way.

According to aides, Cable and the Employment Minister, Ed Davey, are fighting to ensure that plans for growth do not end up with a narrow-focus on restrictive employment laws. However, George Osborne has already announced a range of measures which will make it easier to sack people. In the reforms that have gone through, people are only entitled to claim unfair dismissal when they have been working for at least two years. With further proposals expected on sick pay, it is urgent that this does not become an all-out assault on workers' rights at a time when employment is already so unstable.

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

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How can Britain become a nation of homeowners?

David Cameron must unlock the spirit of his postwar predecessors to get the housing market back on track. 

In the 1955 election, Anthony Eden described turning Britain into a “property-owning democracy” as his – and by extension, the Conservative Party’s – overarching mission.

60 years later, what’s changed? Then, as now, an Old Etonian sits in Downing Street. Then, as now, Labour are badly riven between left and right, with their last stay in government widely believed – by their activists at least – to have been a disappointment. Then as now, few commentators seriously believe the Tories will be out of power any time soon.

But as for a property-owning democracy? That’s going less well.

When Eden won in 1955, around a third of people owned their own homes. By the time the Conservative government gave way to Harold Wilson in 1964, 42 per cent of households were owner-occupiers.

That kicked off a long period – from the mid-50s right until the fall of the Berlin Wall – in which home ownership increased, before staying roughly flat at 70 per cent of the population from 1991 to 2001.

But over the course of the next decade, for the first time in over a hundred years, the proportion of owner-occupiers went to into reverse. Just 64 percent of households were owner-occupier in 2011. No-one seriously believes that number will have gone anywhere other than down by the time of the next census in 2021. Most troublingly, in London – which, for the most part, gives us a fairly accurate idea of what the demographics of Britain as a whole will be in 30 years’ time – more than half of households are now renters.

What’s gone wrong?

In short, property prices have shot out of reach of increasing numbers of people. The British housing market increasingly gets a failing grade at “Social Contract 101”: could someone, without a backstop of parental or family capital, entering the workforce today, working full-time, seriously hope to retire in 50 years in their own home with their mortgage paid off?

It’s useful to compare and contrast the policy levers of those two Old Etonians, Eden and Cameron. Cameron, so far, has favoured demand-side solutions: Help to Buy and the new Help to Buy ISA.

To take the second, newer of those two policy innovations first: the Help to Buy ISA. Does it work?

Well, if you are a pre-existing saver – you can’t use the Help to Buy ISA for another tax year. And you have to stop putting money into any existing ISAs. So anyone putting a little aside at the moment – not going to feel the benefit of a Help to Buy ISA.

And anyone solely reliant on a Help to Buy ISA – the most you can benefit from, if you are single, it is an extra three grand from the government. This is not going to shift any houses any time soon.

What it is is a bung for the only working-age demographic to have done well out of the Coalition: dual-earner couples with no children earning above average income.

What about Help to Buy itself? At the margins, Help to Buy is helping some people achieve completions – while driving up the big disincentive to home ownership in the shape of prices – and creating sub-prime style risks for the taxpayer in future.

Eden, in contrast, preferred supply-side policies: his government, like every peacetime government from Baldwin until Thatcher’s it was a housebuilding government.

Why are house prices so high? Because there aren’t enough of them. The sector is over-regulated, underprovided, there isn’t enough housing either for social lets or for buyers. And until today’s Conservatives rediscover the spirit of Eden, that is unlikely to change.

I was at a Conservative party fringe (I was on the far left, both in terms of seating and politics).This is what I said, minus the ums, the ahs, and the moment my screensaver kicked in.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.