What a riotous start to 2011! I’m too old to remember when midnight on New Year’s Day was truly raucous but, thanks to inmates at Ford open prison, we have a sense of what it must have been like: drink, drugs, bonfires, lots of shouting and screaming, plus television coverage long after Jools Holland and his celebrity chums were safely tucked up in bed. If this is, as some commentators claim, the first manifestation of the effect of this year’s mega cuts in public spending then there won’t be many quiet moments in the months ahead.
Those hoping for 2011 to start with a rather more positive kind of swing will have been enlivened by the sight of Lord Michael Heseltine (aka “Tarzan”) once again traipsing through the political jungle. I must confess I’ve always admired Heseltine, who strikes me as the very best kind of Tory heavyweight. Talent and hard work, rather than social privilege, earned him financial and political success but he nonetheless represents the “one nation” tradition within Conservatism and, unlike many self-made wealthy Tories, was never an ardent Thatcherite. It’s a shame that he didn’t succeed Mrs Thatcher as prime minister in 1990, having been the final instrument of her downfall.
Having served under Thatcher’s actual successor (John Major) in the 1990s, Heseltine adopted a far lower public profile in the New Labour years but has now re-emerged to spearhead part of the coalition government’s drive to boost growth and jobs in English regions. Lord Heseltine is chairing a panel to consider bids from development projects looking for financial support from a newly established £1.4 billion regional growth fund. The Tory peer is widely thought to be ideal for this task, having been at the forefront of urban regeneration policy when a minister in the 1980s and closely familiar with the economic and social challenges faced by localities in need of renewal.
However, what has drawn my attention to Lord Heseltine in recent days is not the detail of his current task but rather the broader content of an interview he gave to the Times newspaper, quotations from which were published on 29 December. Lord Heseltine displays a refreshingly sensible perspective on current barriers to economic growth and job creation, particularly with regard to the often cited bogeyman of employment regulation. He doesn’t see an urgent need for reform of employment law and is quoted by the Times as saying that regulatory and employment law issues “matter much less than the conventional wisdom. Of course there are things at the edges. At the moment the single biggest factor is confidence.”
Why is Lord Heseltine’s comment on this subject significant? Because I suspect that as 2011 unfolds there will be growing frustration that the rate of private-sector job creation is inadequate to offset mounting public-sector job cuts, and a related tendency for the business lobby to use this to support calls for a watering down of employment rights. Such calls should be resisted. If there is a jobs shortfall this year it will be the inevitable result of slow economic growth against a backdrop of reduced public spending and higher taxation. Any shortfall should not be attributed to structural problems in the labour market, including the effect of employment regulation. There may be legitimate arguments for or against improved rights for workers. But it would be opportunistic and unreasonable to use difficulties in the macro economy to justify reducing existing employment rights. Those in any doubt about this are advised to listen to Tarzan’s call.