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Collective pay bargaining ‘must end’

7 February 2011

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Business leaders want to see major reforms to planning and employment laws, including an end to collective pay bargaining in the NHS, to help companies and provide a boost to the economy.

The Government is not doing enough to improve the supply-side of the economy, according to the Institute of Directors (IoD).

The group has produced a paper containing 24 suggestions it believes would help the economy grow with minimal cost to the taxpayer.

Sir Richard Lambert recently fired a parting shot at the Government’s economic policies as he stepped down from his leadership role at the business body the CBI.

He criticised the Conservative-Liberal Democrat Coalition Government for making cuts but not setting out a vision to promote growth.

He spoke just after news that GDP contracted by 0.5% in the last three months of 2010.

The IoD’s suggestions, some of which are likely to prove controversial, include overhauling employment law to make them more friendly towards businesses, and that collective pay bargaining in the NHS and education sector should be ended to boost productivity.

Miles Templeman, director-general of the IoD, said: “The Government’s deficit reduction strategy is central to improving growth prospects and the overall business environment, but the Government also needs to reform the supply-side of the economy to boost the private sector.

“Many of the measures we have proposed today are long overdue and would improve the UK’s infrastructure and the functioning of its labour market. We urge ministers to seize this opportunity.”

The paper suggests the Government should drop plans to abolish the default retirement age, asking “Why does the Government want to make it harder to remove staff who are no longer effective?”.

It calls for the abolition of the right to request flexible working and the right to request time off for training, which it claims creates red tape for firms.

Employers should be protected from vexatious industrial tribunals by making employees put a £500 deposit down before they bring a case, it added.

Copyright © Press Association 2011

Institute of Directors