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News - 17 September 2005
Sir Digby Jones, Director General, CBI

Doubling redundancy pay and giving equal rights to temps could destroy SMEs

Sir Digby Jones, director general of the Confederation of British Industry (CBI) has warned the Government against giving in to the demands of the TUC regarding employment law. At the moment employers are looking to the Government to reduce the burden of legislation particularly around employment not increase it.

Sir Digby said that delivering union expectations on new employment rights would be 'disastrous' for the UK's economy.

As expectations were raised in Brighton about Government delivery of the Warwick agreement', Sir Digby Jones said, "Gordon Brown was on the money yesterday when he said that UK success was dependent on free trade and investment in skills, technology and infrastructure.

"But this could be totally undermined if the Government implements the kind of employment legislation that unions believe they have been promised under the terms of the Warwick agreement.

"Doubling statutory redundancy pay, for example, would hit small firms hard. And introducing equal conditions for temporary workers after only six weeks would undermine the flexible labour market that has helped the UK economy outperform its European neighbours.

"The Government was elected to speak for the whole country, and a door with 'unions only' over it is the architecture of the Seventies, not the 21st Century globalised economy. A world of collective agreements, sympathy strikes and closed employer/union representative discussions will always fail to deliver the dynamism and full employment that has made the UK the envy of Europe.

"Since 1997, companies have absorbed a series of new employment rights in a constructive and forward-looking way. But the Government's commitment to better regulation and a competitive economy will not sit well with pledges at the TUC to deliver ever more employment rights."

Sir Digby also commented on public sector pensions saying, "The private sector is going through the pain of making its pensions provision fit for the changed circumstances of the 21st Century, with people living ever longer and healthier lives. The Government must stand up to the unions and deliver equivalent structural reform to public sector pensions. Taxpayers - businesses and individuals alike - expect no less."

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