Watching Oliver Twist on TV at Christmas, I was struck by the contrast between Oliver’s life and times and today’s life. Compared with today’s nanny state, life was really tough and the difference between the haves and the have nots was enormous. The hard life of a poor person in Oliver’s day was extreme but now things have swung so much the other way that the average person in the UK has become detached from reality.
Today, we often hear the plea from people that they are “entitled” to something, “deserve” something or “it’s unfair”. The recent case of Renault relocating manufacturing from Coventry to Slovenia is a perfect example.
Renault is a company competing in the global car manufacturing industry. It is a private business which has the purpose of maximising its profits. As Slovenian workers work for a quarter of what a UK employee costs, the company made the decision to relocate to Slovenia to reduce its costs.
Long-term employees are up in arms about it and union Amicus is bleating about UK legislation not protecting UK workers enough. The redundancy packages appear pretty generous to me, with workers getting one-three years’ severance pay. They don’t know how lucky they are. They could find themselves a new job within a short period of time and pocket their severance pay.
An Amicus spokesman said the union is campaigning to have our employment legislation as protective as that of Germany and France. The problem with protectionism, of course, is that it leads to even higher unemployment in the long run.
Both Germany and France have poorer economies than the UK and their unemployment rates are considerably higher.
Compare the plight of an ex-Renault employee with that of a small car parts supplier business in Coventry being put out of business as a result of Renault’s decision to relocate. What rights does that person have? What severance pay will he get and which union will stick up for his rights?
I passionately believe in free enterprise, risk-taking and entrepreneurship. This is the very lifeblood of an economy. Unfortunately, successive governments, especially New Labour, have continuously brought in new laws and regulations to protect employees which are largely hampering free enterprise, for example, age discrimination, corporate manslaughter, sex discrimination, race discrimination and unfair dismissal.
When did you last hear of a law being passed to protect businesses in the UK and especially small businesses?
The great irony of all this is that jobs are only created by successful businesses run in a thriving economy. Governments worldwide which support businesses succeed in boosting their economies as a whole, which in turn increases the standard of living for all citizens. That is why the US has grown to be the most successful economy in the world. Love it or hate it, the US is undoubtedly a hugely wealthy country, with very high standards of living for its people. It is no coincidence that the US government supports businesses.
By way of contrast, just look at how unsuccessful the Eastern Bloc became under the Soviet Union and how successful the ex-Soviet countries are becoming. In fact, the emerging economies in the world have a major start on the UK in that they are not as hampered by red tape and bureaucracy and their governments are generally much more supportive of businesses. Added to that is the hunger of the workers who have been living in Oliver Twist-type conditions until recently and are still living like that to a great extent as their economies transform themselves.
Wake up, PC brigade, and face the real world. Stop banging on about what you deserve. Build your own wealth and do not rely on employers and the Government to look after you.
Tony Byrne is financial planning director at Wealth And Tax Management.