Thursday, 24 November 2011

Government hopes liberalisation of employment laws will boost employment

The Government is looking to liberalise employment laws in order to get more people into employment. However, many employees and trade unions are concerned that the proposed measures will have a disproportionately negative impact on workers’ rights.

Disputing such fears, the Business Secretary, Vince Cable, insists that the new policies will create a more balanced working climate. As such, he said that fears over the reforms creating a “hiring and firing” climate were unwarranted.

The Government is convinced that the reforms will support the employment sector by reducing bureaucracy and enabling employers to be more honest with their employees without fear of legal repercussions.
One of the most controversial changes relates to the period that an employee must have been with their employer before they can claim for unfair dismissal, which is to be raised from one year to two years of continuous employment.

After the so-called Beecroft report leaked, speculation arose of the Government possibly scrapping the right of employees to claim for unfair dismissal completely.

The un-commissioned report’s proposal was criticised heavily by the Deputy Prime Minster, Nick Clegg. However, Cable is now intending to ease the running of small businesses, which have fewer than ten employees.
As part of this, the Coalition Government is expected to announce a different unfair dismissal framework for small businesses.

"Essentially, we don't want to create an environment in which there is insecurity and people fear for their jobs. That would not be helpful at all. But we do want to help small companies feel confident enough to take on staff, so there is an issue about balance here."

Trade unions are disappointed with the proposals. Brendan Barber, the TUC general secretary, said: "Reducing protection for people at work will not save or create a single job. It's not employment laws holding firms back, it's the tough economic climate and the problems many companies are having getting the banks to lend to them that's to blame."

The Government is also considering cutting the consultation period on redundancies, from 90 to 30 days. However, Cable said that any decisions will only be taken if evidence gathered supports such a move.
“The whole basis of which we are making policy judgments is evidence. You make decisions based on evidence, and that is the way we are approaching it. We do not want to create the situation in which people feel greater insecurity at work, particularly at times of economic difficulty.

"We also want to create an environment in which entrepreneurs want to start businesses, expand, take on staff and feel confident they can do that. We have to get the balance right but we don't want to create an environment in which people feel insecure at work … That is not what we need."

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Thursday, 17 November 2011

Job losses and job insecurity to last until 2013

On Monday, a report from the Chartered Institute of Personnel and Development warned that the job market is going to experience a "slow, painful contraction". Today, this prediction proved to be accurate as the Bank of England lowered its forecast for UK growth and inflation.

Although opinions vary on when the UK economy will fully recover, the bank’s monetary policy committee did not predict this to happen before 2013. The bank said that "Implementation of a credible and effective policy response in the euro area would help to reduce uncertainty and so support UK growth, but its absence poses the single biggest risk to the domestic recovery".

Although the Government sees the main cause of the current financial climate to be the instability of the eurozone, the opposition says that the high level of unemployment is a consequence of the austerity measures. The Shadow Chancellor, Ed Balls, said, "The British economic recovery was choked off well before the instability in the last few months in the eurozone.

"The government is cutting too far and too fast and it's pushing borrowing and unemployment up at the same time."

The Bank of England said that the unstable climate will remain until the eurozone makes a full recovery. Until then, exports will remain low, which has a negative impact on the UK job market.

Moreover, the Office for National Statistics published new numbers on unemployment. These indicated that youth unemployment has risen to above one million, and that the total people out of employment in the country numbers a staggering 2.62 million.

Many young people are finding it difficult to find employment. Even if they succeed in doing so, they often remain anxious because of the low level of job security. The Government has imposed significant cuts to schemes that encourage students to enter the job market. Additionally, funding to companies employing young workers, youth clubs and charities have been poorly affected by the austerity measures.

Paul Brown, Director at the Prince's Trust, said, "I think it's a wake-up call to the country... We can't afford to wake up in three years time when the economy grows and find that there are a group of young people who have been left behind.

"Unemployment isn't just a financial problem. It can very badly affect the rest of people's lives."

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Friday, 11 November 2011

Is export industry growth a false dawn?

The Office for National Statistics has published new numbers indicating that the manufacturing sector grew slightly in September. However, the overall index of production, which includes mining, oil and gas industries, remains flat. As such, concern remains over the stability of the UK’s production industry.

The ONS numbers showed that manufacturing output increased by 0.2% between August and September. This compares to the previous month, when a 0.3% decline was recorded, and is the first modest growth that the sector has experienced since May.

Positive industry developments have been long awaited as it previously played a central role in the recovery of the UK’s financial state of affairs. Concomitantly with the recession, the pound fell in value. This currency fall was positive for the export industry, as it meant that British goods were cheap to buy for many countries. Hence, British companies could sell their goods and maintain their workforce, which strengthened employees’ feeling of security.

In light of this, the government, in trying to get the economy back on track, is focusing heavily on boosting UK exports.

The British Chambers of Commerce (BCC) optimistically received the new numbers. Its Chief Economist, David Kern, said: "Seeing the sector remain in positive territory despite difficulties in the eurozone and tough austerity measures in the UK is reassuring.

"Although pessimism about the health of manufacturing is unnecessary, the sector does face difficult challenges and we must reinforce the modest recovery that we are seeing."

However, Chris Williamson, chief economist at the financial information services company Markit, doubted that the numbers indicated a turn in the financial climate.

"This is a disappointing rate of growth for a sector that was hoped to lead the UK's economic recovery, and growth looks set to weaken further in the final quarter of the year." Furthermore, Williamson said that the slow economic growth meant that there remained "a clear risk" of the sector going back into recession, unless it experienced significant growth in the near future.

However, any considerable growth seems to be far off in light of recent industry surveys. These have indicated that the sector is struggling significantly, and that it has experienced a drastic fall in orders.
This is inconsistent with the ONS numbers. Effectively, the findings of the industry surveys point to a deterioration in the sector’s performance. This can be due to the fact that manufacturing has been seriously affected by the decrease in consumer spending and the eurozone debt crisis.

Williamson said that any numbers must be interpreted in the context of the global financial climate. "While there are signs that UK producers are raising their productivity, facing up to the need to adapt and compete aggressively in today's markets, the simple truth is that the current weakness of economic growth at home and abroad means that producers face a challenging time ahead."

This challenging time is likely to make many workers concerned about the security of their jobs. Seeing that Britain relies heavily on Europe as a trading partner, many UK jobs are dependent on the eurozone crisis being solved.

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Friday, 4 November 2011

Further job losses on the horizon as 2012 approaches

New Government measures could are likely to mean that green energy companies will have to cut the number of employees. This is likely to be a consequence of this week’s Government announcement that anyone who installs a solar panel power system after 12 December this year will only be paid half of the current Feed-in-Tariff (FIT).

Under the Government’s FIT scheme, consumers who install electricity-generating technology from an environmentally friendly source may be entitled to get money from their energy supplier. For consumers, this means that the price of their electricity bills will decrease.