Companies could face extra costs under Government plans to offer workers a guaranteed payment when they lose their jobs. Ministers are looking at a scheme to impose a legal minimum on how much employers have to pay employees who are dismissed.
Essentially this is a rearguard action. There are those who wish to raise the maximum statutory redundancy pay and those who think that this can be headed off at the pass by introducing a minimum amount payable.
Both are, of course, being fatuously stupid. We are pumping hundreds of billions of guarantees into the banks so that they will lend to companies. This is so that companies do not go bankrupt thus leading to soaring unemployment. The aim is to prevent that loss, not just of output but also of human effort and even the dignity that comes from productive labour. I might argue with specifics but the basic aim seems fine to me.
Then we have fools suggesting that now would be a good time to raise the amount that must be paid to workers who become redundant. These proposers seem to have missed a vital point: it is illegal to trade while your business is insolvent. That is, that if you have insufficient funds to pay all your debts then you must close down and make all of your workforce redundant. One of the debts that you have to be able to cover is the statutory redundancy payments to that very workforce.
Soooo, if you raise the statutory redundancy payments then you'll raise the debts that companies have to be able to cover in these straightened times, these times of scarce capital and even scarcer bank loans, meaning that more of them will, by law, have to close thus throwing more of that precious labour onto the scrapheap of unemployment.
Could someone please remind me why it is that we are forced, at threat of prison, to pay for the people who come up with such ludicrous ideas?