Saturday, 1 October 2011

Tories face union anger over unfair dismissal

Workers with less than two years' service will be prevented from taking their employers to a tribunal for unfair dismissal under government plans to boost the economy. The proposals, to be unveiled by Chancellor George Osborne at the Conservative Party conference, will see the qualification period increased from one year to two from next April.

It is likely to open a new faultline between the coalition and trade unions. But Mr Osborne told the Sun: "We talk a lot about trade union rights - but what about the right of the unemployed person to be given a shot at a job and a career? What about the rights of people currently sitting at home with nothing to do, desperate to get work, but the business can't afford to employ them because they fear they are going to be taken to the tribunal?"

A total of 236,000 employment tribunal claims were made last year, with an average award of £8,900 for successful claimants, and the average cost of defending a claim at £4,000, according to Treasury officials. It is claimed the change in law will benefit business by around £6 million a year in reduced legal fees and payouts, while employees are expected to lose around £1 million in unfair dismissal awards. Under the proposals, employees will still retain "day one" rights, such as the right not to be discriminated against.

Writing in the Daily Mail, Prime Minister David Cameron said: "Deficit reduction is an essential step for economic growth - but it must be accompanied by a plan for jobs too." Claiming that it is businesses, not governments, which create jobs, he added: "And the role for government is not to single out good and bad industries, it's to make it easy as possible for all industries, all business, to grow, invest, take people on. And whether it's cutting corporation tax, investing in superfast broadband or getting to grips with employment regulations, that's exactly what we're doing."

Meanwhile, the possibility of tax cuts before the next general election depends on "how things develop" between now and 2015, Mr Osborne said. Ahead of this weekend's conference, the Chancellor offered a highly cautious verdict on the prospect of tax bills coming down. He indicated that his primary focus was for now on promoting private sector growth and that he would only want to introduce tax cuts that would be permanent - "not just for Christmas".

It has been thought that, having reduced the deficit by the end of the Parliament, Mr Osborne would want to offer some kind of pre-election sweeteners. But, in an interview with The Daily Telegraph, he was non-committal about the likelihood of tax cuts amid continued economic turmoil around the world. "We'll see how things develop in the rest of this parliament," he said. "I'm a conservative who believes in lower taxes. They lead to a more enterprising economy. But I'm not somebody who believes you can fund lower taxes by borrowing more money because that is a deceit and the public are smart enough to see straight through it."

Insisting his first priority was on dealing with the deficit, he said he did not want to offer tax cuts that had to be reversed very quickly. "I don't want to be a Chancellor who cuts taxes one year and has to put them up the next," he said. "A country with an almost double-digit deficit cannot add to its deficit in the middle of a sovereign debt storm to cut tax, presumably on a temporary basis, because you would have to then put it back up again to deal with the deficit. Tax cuts should be for life not just for Christmas." [wanker - Ed]

He also indicated that scrapping the 50p top rate of tax, which would intensify Liberal Democrat calls for the introduction of a "mansion tax" was not an immediate priority. "This is not an issue for this autumn," Mr Osborne said. "We have plenty of economic issues to discuss - we've got the situation in the eurozone, the situation in the world economy. We are doing everything we can to get the British economy moving. That is where my energy is spent."

Independent/Press Association