Government harassment

I try to keeps my views on the policy-makers out of these pages, for reasons that are just about to become apparent, but this morning I read about the latest Government nail in the coffin called entrepreneurship.  

Over the last few years, employers have gradually been drafted to perform more and more ‘government’ tasks, such as collecting VAT and National Insurance Contributions, organising and offering pensions, paying and collecting back maternity and paternity pay, checking passports of workers from overseas and so on.  It is presumably assumed that business owners have plenty of money to pay for the additional administration and plenty of time to find and manage the temporary replacements for staff not currently working.

And if, for example, their skills at recognising a fake identification document are not up to scratch, of which there are 13 different types along with passports from 27 different EU countries, they should quite rightly face a fine of up to £10,000.  Right?

While this has been occurring, the mandarins have simultaneously neutered small business by giving employees stronger rights and forcing business owners to spend significant sums of money on legal and insurance products. 

In a previous role I was taken to tribunal by a man to whom I didn’t give a sales job.  Partway through an interview by two trained staff the man, who clearly had no sales ability despite a CV to the contrary, feigned a problem with his hearing aid and subsequently filed a complaint of disability discrimination when he didn’t get the job.  The ensuing process consumed not just money, but irreplaceable amounts of time and enthusiasm only for his claim to be thrown out at the tribunal.  We were asked to include one additional question in our interview process (along the lines of ‘are there any disabilities that we need to make allowance for at your interview’) which we had already implemented, while the man walked away with no requirement to pay costs as he was on legal aid.  Although he got nothing on this occasion, he had achieved varying levels of success from the six previous companies he had claimed against.

The employer has fast diminishing rights and the only way to sleep at night is to pay the protection fees in the form of legal cover, employers insurance, directors liability insurance etc.

The latest ruse by the Government, reported in Fresh Business Thinking is to make employers liable for third-party sexual harassment of their staff, with unlimited damages.

Now, before I get a stream of bad press, I am not advocating that the ideas behind these policies are wrong.  People should be encouraged to plan for their retirement; mothers and fathers should be able to spend time with their new-born children; employees do need rights to protect them from unscrupulous bosses; likewise they should not have to endure harassment of any kind.

BUT and I really do mean the size of this BUT, why should the owners of small and medium sized businesses, who risk their savings, houses and relationships in the pursuit of running their businesses, automatically have to be liable?  Think about what that means to an individual: unlimited liability.  And in this case for something over which they can have scant control.

Running a business is terrifying enough without these additional burdens and anyone who says that the level of red tape (and associated costs in money, time and stress) is acceptable is either lying, has not noticed and is thus leaving themselves open to great peril, or has never started and run a business.  It would not surprise me in the least if the mandarins who design policy and the politicians who wield it sit firmly, with their index-linked final-salary pensions, in the latter camp.

Meanwhile the group of 4.3 million business owners, who between them employ more than 58% of the private sector workforce and contribute more than £1,200 billion to UK turnover, are each an unpaid tax collector, immigration clerk, pensions advisor, smoking monitor, and so on.  And in the main they are individuals, with 95% of them employing less than 5 people (Stats from FSBwith thanks).  The work they do for free saves the country tens if not hundreds of £millions a year, but their contribution goes unsung; the cost to their individual businesses in lost productivity is inestimable and their potential liabilities under the current administration simply staggering. 

The government needs a radical rethink of the way that it looks at and engages with SME’s.  For example, recent RSA research points to a correlation between entrepreneurs and right-brain thinkers.  These people are creatives and need to be nurtured rather than chained.  I firmly believe that the country could raise far greater tax revenues from small business by helping them to succeed, to employ more people, to generate distributed wealth, all of which buoys the economy, rather than hindering them at every opportunity.

If the mandarins and politicians are prepared to even consider that policies can be implemented without making SME’s liable, then I’m sure that I’m not the only creative who is prepared to step forward and work with them to make it happen.

 I welcome any comments on this and any of my other thoughts. Comments are moderated, but only to excise spam.

1 comment to Government harassment

  • It all comes back to one word – responsibility. No-one seems to want to take responsibility for their own actions, so the government step in with ill-thought through legislation. If we could focus on getting responsibility taken from the ground level, from school kids up, THEN we have a chance of making the world (!) a better place.
    Until everyone takes full responsibility for their own actions and consequences, including responsibility for your childrens actions, littering, behaviour and conduct and so on, we are set to see more of this type of legislation, which will no doubt put some business owners off. The overheads in setting up a business PROPERLY these days are so high with all the rafts of insurance and legal protection you ought have, that many dont do it at all and wing it – thats where all the profit often is (certainly in the first few years!)
    Oh, and whilst we are on the R’s – Respect would be good too – lets teach that from day one..