Lord Young of Graffham, the 81-year old former cabinet minister under Margaret Thatcher, who is now the Prime Minister’s adviser on ‘enterprise’, was on the BBC Radio 4 ‘Today’ programme today saying that 95% of the companies in Britain are small enterprises employing a couple of people or fewer. ‘If they all hired one more person, our unemployment problem would be solved’, he said.

The trouble is, what sort of employment is it? The Conservatives such as Lord Young want to ‘reduce red tape’ allegedly affecting small businesses, so as to encourage more people to start up small companies. Revealingly, Lord Young also said recently that a time of economic recession (the existence of which he conveniently denies) ‘low wage levels … made larger financial returns easier to achieve’ for the owners of businesses (The Guardian, 11 May 2013).

The difference, seen from an ordinary employee’s viewpoint, between a big company and a little start-up, is in the likely security and longevity, in the overall quality, of employment offered. Rolls-Royce in Derby (and worldwide), whom I recently visited, offer 100 local youngsters apprenticeships, and 100 graduates graduate training programmes, in their Academy each year. Once their training is complete, these people can expect long-term, pensionable employment with full employment protection under the law.

In a start-up following the Lord Young model, young people will be employed for short term contracts on the minimum wage, contracting out, where possible, of the protection offered by law – for example under the Working Time Directive, limiting employees’ hours of work. They will have minimal job security – this is the obverse of the much-vaunted ‘flexibility of employment’ which the current government makes such a virtue.

The Thatcherist programme continues. Having destroyed much of our manufacturing industry, the Thatcherists now work to ensure that the gap in quality of life between the rentiers, the bosses, and the employees is not just a question of rewards – although that gap has widened hugely since Thatcher came to power – but also involves huge disparity in job security and the ability to achieve a stable place in society.

Is there any evidence that cheap labour automatically makes for successful business? I suggest not. Good products and investment in people and technology would seem to be much more productive. Rolls-Royce in the UK, or, for example, Mercedes-Benz in Germany, are good examples. Government should make policy to help such companies to grow and prosper, rather than adding to the number of vulnerable, rootless and exploited short-term workers without proper skills, training or reward.

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