A response to Employment Rights and Bankruptcy Law

While the Conservatives claim deregulation of Employment is the key to economic growth, this is a total mis-conception.

The real issue that needs to be addressed and has never been addressed is the total bias towards financial institutions when a business has financial difficulties and eventually enters administration insolvency.

Due to the ability of Financial Firms to leverage up and participate in the financing of leveraged buy-outs, in the knowledge the financial firm has preferential creditor status, up until 2007 there was a plethora of exceptionally highly leveraged buy-outs that eventually went horribly wrong. Southern Cross ring any bells.

SME's who may typically provide credit  on 60 90 days plus to highly leveraged  organizations, should be treated in the same way as financial firms. As it stands these SME's can be wipe-out in any insolvency of these highly leveraged firms, destroying many more jobs down the food chain

It is the leveraging up of corporate buy-outs that has destroyed so many jobs, when they go horribly wrong. Changing Employment regulation does nothing to change this real problem that is not being addressed at all.

Despite the Governments Big Idea on Employment there are much better solutions such as changing Bankruptcy law to ensure we never again have such a leveraged Buy-out bubble that destroys many more jobs.

The exceptionally high bonuses paid on leverage Buyouts should be immediately subject to Claw-backs. This includes Top Management Pay when things go horribly wrong.

The inherent structure of Capitalism is flawed providing a Get Out of Jail Free for Banks and their Bonus culture while those on poor wages suffer yet again. This inequality of those at the bottom needs to be addressed and I can't see the Conservatives considering that actually improving the wages of those at the bottom as being a priority.

The irony is that those at the bottom spend proportionally more in the economy than those at the top and therefore it would quickly and instantly start driving the wheels of the economic engine if those at the bottom at more disposable income.

Toby Chambers
Economist
Social Entrepreneur