Letter from David Cameron

PRIME MINISTER 27 January 2011


For all the column inches written about it in our newspapers and words spoken by economists, there’s really no mystery about what drives economic growth and creates jobs. It is business and enterprise – these are the engines of our economy. It is expanding businesses and the people with the courage to strike out on their own, the curiosity to innovate and the confidence to invest who are going to fire up economic growth in our country.

That’s why this government is relentlessly focussed on getting behind them. We’re asking businesses what they need to grow and prosper and we’re acting on the answers.

They want reassurance that the economy is sound – which is why we’ve taken decisive action to cut the deficit and restore sense to Britain’s public finances. They want more reasonable tax rates – which is why we’re now on course for the lowest corporation tax in the G7. They want the endless flow of new regulations to stop – which is why we’ve said that any new rule on business can only come in at the expense of an old one. And they want credit – which is why we are working hard to get Britain’s banks lending again.

But speak to businesses and they’ll say something else: that the balance of rights is tilted far too much in favour of employees over employers. They say it’s become far too difficult to hire and fire workers, and far too easy for those workers to make unscrupulous claims against them. This not only costs our businesses a lot of money – on average around £4,000 for defending a tribunal case - but takes up a huge amount of time and effort too. Vitally, it makes businesses think twice before taking people on.

I’m determined we shift some of that balance back. That’s why today we’re publishing two really important documents. The first has been a long time coming: an Employer’s Charter. This sets out clearly the rights they have in the workplace. For example, the right to withhold pay from those who go on strike or to sack someone for poor performance. It’s all there in black and white so there’s no longer any confusion.

The second is a consultation on how we can make the whole system work better. I don’t just want us to sort out the practical issues – like speeding up the tribunal process and encouraging people to resolve disputes between themselves instead of through the courts. I want us to get to the real crux of the issue too. At the moment, an employee can bring a claim for unfair dismissal after working at a company for just one year. So we’re proposing to extend that to two years.

All this isn’t just good for employers; it’s good for workers too. No one wants to spend months on end worrying about a claim. And if businesses are more confident to take people on, it means more jobs for everyone too.

Have a look at what we propose yourself. You can see the Charter and consultation here. Better still, give us your feedback. If you run a business and think we can do things in a better way, let us know. If you don’t run a business but know someone who does, forward it on. And if you’re a worker or lawyer who’s had experience of a tribunal, let us know how we can improve the system.

Together, let’s create the conditions where business is really confident to invest, and jobs, growth and prosperity are created.