Despite all we have lived through and, despite the reality that Britain has one of the most deregulated labour markets in the industrialised west, there is still an influential body of opinion that believes with religious zealotry that the response to unemployment must be further freeing up of the labour market.
The cumulative effect of a growing body of employment law, it is argued, combined with the increasing tendency of people to use it, amount to a brake on enterprise. Cue David Cameron's folksy elision between being "pro business and pro jobs". Imaginary entrepreneurs are invoked agonising over whether to unleash the next great leap forward after an encounter with the minimum wage regulations and the qualification period for unfair dismissal. There are issues over hiring, but they are not these.
Start with the 56% rise in employment tribunal claims, apparently proof that the system is out of control. But peer inside the machine and a few points stand out. Most of the rise is explained by trade unions bringing multiple claims on behalf of their members on such tortured legal questions as equal pay (collectivising the individual rights system, in other words). Take them out and the rise is a more modest 14% - more reflective of tough economic times than a broken system. Also the numbers of claims need to be set in the context both of a relatively low success rate - only 10% win their claim - and currently low levels of strike action.
I do not want to dismiss the time taken, the fees incurred and the reputations staked when a claim lands on anyone's desk. I imagine many readers of this column have experienced the whole sorry and time-consuming business. But is this the reason for 2.5 million unemployed?
The US, with its notoriously hire-and-fire culture, is teetering on the brink of a job creation crisis. The Scandinavian countries have maintained fullish employment with relatively tough labour laws.
Even those studies that detect a correlation between labour market regulation and unemployment suggest it is, at best, modest and depends heavily on the definitions and variables included in the statistical regression. In practice, the relationship owes much more to the faith of the orthodox than the weight of the evidence.
Job generation and retention need to be understood in much more subtle terms. The economy is increasingly knowledgebased and fast moving. Knowledge workers recognise the new realities. They also demand respect - the chief driver of tribunal claims rather than a mischievous abuse of the system. Most workers know full well that a tribunal claim is akin to work-place suicide. It is desperation that drives many to use the system.
It may be that high redundancy costs deter some employers from hiring. But if such costs are to be lowered, then we need to compensate - one of the reasons I advocate the introduction of livelihood insurance. We cannot simply load risk onto ordinary people without thought in the name of deregulation. It did not work in finance; it will not work in the labour market.
This is why the Coalition must resist the clamour. The UK's flexible labour market has held up remarkably well in the recession. However, the signals emanating from Whitehall are too confusing to read. On the one hand, government is preparing to scrap the retirement age, enable shared parental leave and expand flexible working; on the other, it is bowing to the pure old-time religion with its 'employer's charter' and tribunal reforms. It should go with the evidence.
Will Hutton is executive vice chair of The Work Foundation
