George Osborne needs better advice

Even George Osborne has employment rights

If the Government are to make progress with the national finances, then George Osborne needs better advice or perhaps should recall the story of Enron.  His speech at the Tory party conference this morning suggested that his memory of the Enron story was already consigned to history and suggests a lack of understanding about business or people. I’m not referring to his last budget, but the announcement that employees are likely to want to swap employment rights for shares in the company that employs them.  The rights to be given up – unfair dismissal, redundancy and time off for training, which could be swapped for £2,000 – £50,000 worth of company shares, which would be exempt from capital gains tax when sold. The fact that most people do not pay capital gains tax is somewhat lost on him and anyway CGT has a lower rate of tax than income tax, thanks to another blunder by the previous Government.

Employment Law red tape

We are in recession. There are plenty of opportunities for those that wish to find or see them, but it is not always the case that these are within reach of “ordinary people”. Any business looking to use this new arrangement has surely found itself in the position of having too many staff to do the work at hand. The shares will invariably be fairly illiquid and who knows what they will be worth (if anything). Perhaps he should seek advice about amending existing employment law, but not abolishing it. Yes there are lots of examples of silly red tape and “bad” employees, but equally there are examples of very poor employers. His proposals seem to miss the point of share ownership and employee rights and sets a worrying suggestion that the two are opposing concepts and I think that Mr Osborne needs better advice on this.

The Mansion tax

What we do have from Mr Osborne is an announcement of a £10bn cut in the welfare budget and an end to debate about the mansion tax, which is simply a wealth tax. I reckon that Mr Osborne needs some better advice. Look, I’m not in favour of high taxes, I do believe that we need a welfare state that provides for those that are in genuine need, but otherwise people should be incentivized to create and build wealth. I know this is not easy. Of course the rich should pay a fair share, but we all should. Having different rates of tax for different forms of income is daft and results in people finding legitimate ways to minimise tax. Of course, your own opinion may differ radically from mine, but I prefer to believe that individuals should chose how to spend their money not the State (who seem to make a pigs ear of the task – whatever party run the show) and it is a given that we need a good basic welfare state safety net. I still maintain that a single rate of tax is fair to all, yet no politician has the gumption to approach this very simple concept.