Since I coined the expression “business on benefits”, I have been asked by a number of people to expand upon what I mean by that.
I originally coined it to reflect some of the ways we offer business support. On later addressing greater detail, however, it strikes me that the term encompasses three things found in modern British business:
First, there is the use of the benefit system by those employers who seek to make viable employment by a combination of employees supplementing wages with benefits. So many people in work are on various forms of tax credit. Away from the “zero hours contract” debate, we rarely explore the issue of part-time workers who have been retained on hours that are at a level that benefits the employer as much as it fits the lifestyle of the individual.
This means that these people can flexibly be pulled into extra hours work and not even benefit from overtime rates until they rack up “full time” hours. The reality is, many employers now create part-time jobs because this flexibility suits them rather than the employee, cognizance of the fact it is sustainable because the individual can access benefits alongside wages.
Two part-time jobs put out as a full-time job would still attract employment, but would reduce the burden upon the state. Now of course, part-time jobs do benefit a whole range of single-parent households and others and have a great social benefit. However, when the strategy by employers is to minimise labour costs by utilising people on state benefits in combination with wages, instead of creating full-term posts, one has to question the morality of this and whether the bottom line is getting in the way of a social contribution. Cheap prices at the checkouts are no consolation to the consumer, if the savings are being recouped through tax revenues spent on benefit.
Second, there are those companies, which seek to exploit the benefits of the market space the UK offers whilst unashamedly and yet with ever-increasing means of sophistication avoiding their contribution in terms of tax revenue.
We are very quick to condemn the individual person in the street who misuses the benefit system and yet there are large organisations, which do not contribute appropriate levels of tax, to which the title “sponger” is every bit as appropriate as it is to any of those people who might be shamelessly manipulating benefits.
Beyond those exploiting loopholes and employing armies of accountants to reduce the pay to the Exchequer, there are those who unashamedly evade, for which the title “thief” is perhaps more apropos.
Finally, and this has become a bit of a chestnut to me and makes me somewhat unpopular amongst a number of organisations in the field, is the welter of distributive mechanisms that provide grants et cetera, typically from the European Social Fund, to support business. These huge rationing mechanisms will not indicate what their costs are in the administration of the grants they give and are huge and enduring organisations. Their funding may help some businesses but also, simultaneously distorts the market and devalues professional advice and other services given within that market space.
Finally, I go back to the national shambles that was the lottery of Growth Vouchers.
With a new Government and all political parties beginning to wake up to the needs of listening to business, rather than ploughing on with well-meaning but understandable policies born of ideologies that need to be funded from business growth and wealth generation, the time is right to review these issues. Corporate and social responsibility policies of organisations simply cannot guarantee to hold them to account for the ethics and moral values of their leaders and create a culture of contributing to communities and to nation-states.
Equally, government needs to “get” business large and small, particularly the small. I believe government is presented with a selective view of business. It’s inevitable, when 80% of the corporation tax revenues come from the top 200 companies, who are the opinion formers and the business community. Whose telephone call or letter is a minister going to prioritise for meaningful response?
With the Prime Minister attempting to create a much more fulfilling society for every person that is born on the premise of sustainable, fulfilling work and achievement, it’s time for everyone to wake up and decide if are we going to continue with selective views of the business economy or are we to have a real debate that includes even the smallest members of our business communities with policies grounded in sensible pragmatism and inclusion.
We stand at the crux of a golden opportunity here. I am rather hopeful. It is to be hoped, however, that we have real change and do not fall into the old tramlines of elitist and tribalistic practices or politicians thinking that they’re on receive when in fact they’re stuck on transmit.
David Cliff is Managing Director of Gedanken and Chairman of the Institute of Directors’ Northern Sector Group.