If only we could unchain Britannia from Dominic Raab-style dogma about workers’ rights

Like a stopped clock that always tells the same time, there’s a certain breed of British right winger who forever insists that the magic formula for economic growth is to be found in making life for ordinary workers more precarious.

Seven years ago David Cameron commissioned a Conservative donor and private equity magnate called Adrian Beecroft to review employment law. The big idea in Beecroft’s thin report was to introduce “no fault dismissals”, effectively enabling UK employers to fire workers at will.

Beecroft was left to gather dust on a Whitehall shelf after the then business secretary, Vince Cable, openly trashed it. But Beecroft’s proposals became a rallying banner for the right-wing press. And its influence may not be dead. For another believer in the salutary effects of a hire-and-fire culture is none other than the newly installed Brexit secretary, Dominic Raab.

Around the same time that Beecroft delivered his report, Raab authored a pamphlet asserting that UK employment legislation represents a “straitjacket” for the economy. And like Beecroft, Raab proposed allowing employers to fire at will. For the sake of the unemployed, he implored the government to “urgently reduce the burdens of employment regulations”. Raab followed this up a year later with Britannia Unchained, a book written with some other Tory backbenchers, in which the British were labelled “among the worst idlers in the world”.

Theresa May claims to be delivering a historic expansion of workers’ rights and protections, especially for those in the gig economy. But Raab has said nothing over the past seven years to distance himself from his earlier convictions about the cosseted nature of the UK workforce. Indeed, given the unreconstructed Thatcherite wing of the Conservative party (of which Raab is a member) believes leaving the EU will allow the UK to scrap various worker protections, it seems pretty likely that he sees Brexit as a chance to implement this agenda; to “finish the Thatcher revolution” as Nigel Lawson puts it.

It is important to recognise that it is possible to have too much worker protection. When employers find it extremely onerous to shed or move workers in response to inevitably evolving economic conditions, the result can be a damaging reluctance to invest. This can also contribute to a two-tier workforce, where older workers have blanket security but younger workers are never taken on and consequently tend to cluster in chronically insecure and informal jobs. We see symptoms of this illness in countries such as Spain, France and Italy.

But not here in Britain. Indeed, the past decade has furnished a comprehensive rebuttal of the Beecroft/Raab view of the UK economy. The national unemployment rate in 2011 was more than eight per cent. Today it just over four per cent, the lowest since the mid-1970s. This “jobs miracle”, as Conservative ministers tend to style it, happened without a Beecroft-style assault on workers’ rights.

Whatever has been ailing the UK economy, it is not excessive protection of workers. Indeed, even seven years ago cross-country studies by the OECD clearly showed that the UK labour market was, by international standards, exceptionally flexible. Workers’ protections in the UK are lower than in every other developed country apart from the US, Canada and New Zealand.

As for the Britannia Unchained claim that Britons are exceptional “idlers”, this was largely based on our low productivity (output per worker) relative to peer economies such as France, Germany and the US. No one knows for sure why there exists such a productivity gulf between the UK and our European neighbours. But there are good grounds for suspecting that the answer lies in factors such as a deficient investment in workers’ skills and in poor management practices, particularly among smaller companies.

There is no credible basis for claiming that it is due to a national aversion to hard graft.

Indeed, some believe that the UK’s ultra-flexible labour market might be doing more economic harm than good, encouraging a proliferation of low-productivity jobs and discouraging investment in labour-saving equipment by firms. Could the road to a more productive economy lie through more security for workers? That case remains to be made convincingly. But it’s surely long past time that we unchained Britannia from discredited right-wing theories about the harm done by workers’ rights.

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