ANDREW GRIFFIN
Ministers have tried for months to hand-wave away Britain’s increasingly desperate jobs figures with unconvincing excuses. ‘It’s AI, it’s global factors, it’s post-pandemic adjustment, it’s bad data,’ go the refrains of the unlucky few foisted on the media round for the monthly ONS release. The increasingly obscure ministers Labour HQ have put up may play the fool, but voters aren’t falling for it.
The public know the truth and they know why it’s uncomfortable for Labour: unemployment is rising because the Government has made hiring people more expensive, more bureaucratic and riskier than ever before. Put in the vernacular of the online world: ‘they f****d around, and now they’re finding out’.
Numbers don’t lie. In the 12 months to the end of January 2023, the UK lost more than 130,000 payrolled jobs – unlike the embattled Labour Force Survey ministers like to quote to paradoxically claim employment rates are up, these figures come from real time Treasury PAYE data, and are as close to bullet proof as it gets.
Youth unemployment has surged to 16.1%, meaning that one in six young people want a job but can’t find one. It’s no surprise when some estimate that half of the over 200,000 jobs lost since Labour took office have been among the youngest.
It shouldn’t be surprising that young people are worst hit when a government treats businesses like the enemy rather than the source of growth. Most of all we tend to tax and regulate things we don’t want. For Labour, it seems, this is jobs and growth. I am fond of Warren Buffett’s business partner Charlie Munger’s famous saying: ‘Show me the incentive and I’ll show you the outcome’. We’ve now seen both.
At the heart of the problem sits Labour’s Employment Rights Act: a sprawling, 330-page, union-drafted charter that piles cost upon cost onto employers. Firms are being forced to recognise unions, grant workplace access, offer guaranteed hours and face unfair dismissal claims far earlier than before. According to the Chartered Institute of Personnel and Development, more than a third of employers now plan to scale back hiring directly because of these changes, while half expect greater workplace conflict.
Tomorrow, in a tone-deaf approach that would shame Imelda Marcos, the Government will barrel ahead with introducing a new barrage of powers for trade unions which will make strikes easier and unemployment worse. It’s no wonder that many bosses say the only thing growing in the economy is red tape.
Such bureaucracy comes on top of Rachel Reeves’ National Insurance raid, which raised employer contributions while slashing the threshold at which they apply – a hammer blow to precisely the part-time work, hospitality and entry-level jobs which are often the start of a career. Above-inflation, state-set minimum wages exacerbate the issue – particularly the significant hikes for less experienced workers. For young people trying to climb the first rung of the ladder, the rungs are being sawn off in real time
Worse still, Labour have removed long-standing caps on employment tribunal awards. With a tribunal backlog already approaching half a million individual claims, employers now face open-ended legal risk when taking on staff. Unsurprisingly, many are choosing not to take that risk at all. As one leading employment law firm put it bluntly: ‘this does not sound like a recipe for growth’.
Ministers claim this is all being done ‘for workers’. But a policy that prices people out of jobs is not pro-worker – it is pro-unemployment. France has spent decades proving that rigid labour markets protect insiders while locking outsiders, especially the young, out of work. Labour appear determined to import the same failure.
If the Government was actively trying to encourage firms to automate or offshore jobs, it could scarcely be doing better. AI bots do not strike, file tribunal claims or require HR departments. Overseas contractors are not bound by UK employment law. Add it all up and the present situation looks like an employment bloodbath.
Labour have taken what was historically a strength: our flexible jobs market. Like philistines who know not what they do, they are blind to the harm they wreak. While it’s unlikely that many of the MPs and ministers complicit in this will be around for the long run, the real cost will not be borne by them, the union barons or their friends in the public sector. It will be borne by the young people who desperately want their first shot, who are reaching for the first rung on the ladder, and who are having it kicked cruelly away by a Government that promised opportunity but delivered stagnation and a life on welfare.
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This article (Labour are waging war on British jobs) was created and published by CapX and is republished here under “Fair Use” with attribution to the author Andrew Griffin
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