Sam Gyimah MP: Relaxing labour regulations is only one part of the package to create jobs

Sam Gyimah is the MP for East Surrey

Business is back in the dock.  And the outright hostility to the Beecroft proposal for ‘no fault dismissals with compensation’ highlights how deeply ingrained suspicions of business (the organisations with the profit motive) are in some quarters.  Yet it is businesses that will drive our recovery.

No smart employer would want to gain a reputation for firing as quickly as they hire. As anyone who has run a business knows, attracting and retaining talent is the most time consuming and costly part of the job. Recruitment fees for a new employee can easily run to 25% of the first year salary, after which the employee has to be trained and given at least three months, on full pay, to bed in to the new role. So before most employees have added value to their new company, the would-be employer has incurred significant costs just to have them on the payroll.  Having been through the trouble of assembling a team, again smart employers put in place perks, training opportunities and team bonding activities because they realise that people are the greatest asset of any business.  In fact, the job insecurity for employees in a hire-and-fire culture means that most employees will gravitate towards companies that offer better pay and employment protection.

Sam Gyimah MP: The Chancellor should use credit easing to change the lending landscape for British business

Sam Gyimah is the Member of Parliament for Surrey East.

In troubled economic times, effective Governments act boldly.  And with low borrowing rates and our AAA credit rating still intact, the coalition is reaping the rewards of its far-sighted decision to make deficit reduction a priority when it was not the International consensus.  The hurricane Ed Balls forecast last year may indeed be wreaking havoc on the continent, but the Coalition is building its house on solid economic foundations. Now the challenge is to restore prosperity, and again there is scope for the Chancellor to be radical in reshaping the lending landscape, so that businesses get the capital they need to grow.

The Autumn Statement next Tuesday is an ideal opportunity.  Investment in businesses continues to be held back by levels of bank lending, which have remained low since 2008 and are likely to fall further as the Eurozone crisis deepens. This is why credit easing is necessary and right.  The concept is to inject new money into vital parts of the economy, specifically by making it easier for small and medium enterprises to access the finance they need to create jobs and fuel Britain’s economic recovery. Expectations are that credit easing will involve a partial Government guarantee on loans made to businesses through the banks, thus allowing the overall amount of business lending to increase.

But in making his announcement next week, the Chancellor has the opportunity to go much further than stimulating lending to business in the short term and to deal with the deep-seated problem which is that our banking sector in too concentrated and uncompetitive, working  well for the banks but not always for the businesses. Most businesses will tell you that their relationship with their bank is on a take it or leave it basis.  That is why in a report published today (in conjunction with NESTA) after a four month consultation with business-owners, entrepreneurs, investors and economists, I have argued that credit easing could go ‘beyond the banks’ to unlock news pools of capital to finance UK SME's.

Sam Gyimah MP: We can give student protesters real power by giving them worthwhile degrees - but let's stop all talk of limiting student numbers

Sam Gyimah is MP for Surrey East.

Protest can be a powerful thing. The students marching on our streets should indeed be angry about our higher education system – but not because of tuition fees. They should be angry because graduating from university today is not the game-changer in life many of them hope it will be, but an experience that often just leads to     desperate disappointment. The grim facts are that graduate unemployment is now at its highest level since 1995, with one in five university leavers failing to find a job last year.   The paradox here is that while   Britain undoubtedly remains a world leader in higher education, second only to America, we have graduates being told by employers their degrees are not worth the paper they’re written on.  

And yet, the public debate on universities is focused almost entirely on the funding crisis facing universities and the rise in tuition fees – the ‘inputs’ – or using Oxbridge admissions as a proxy for old class wars. How many times have we read about the “outrageous” rejection of state school pupils with 5A’s by Oxbridge colleges? Yet where is our indignation at the frankly more scandalous fact that worryingly high drop-out rates at some of our universities are leading to one in five students – often from poor backgrounds - dropping out before they finish their degree and gain those vital qualifications? It’s about time the debate focused more on the ‘outputs’ of the system as a whole; specifically, the quality, outcomes and purpose of an expanded higher education system.   Put simply, we’ve got to start making university deliver for all our young people, not just the few who aspire to study at our most elite universities.

For some the solution lies in going back to the ‘good old days’ when there were fewer students and everyone else got on with apprenticeships and learning a trade.  They are both right and wrong.   They are right to identify that the problem is with the supply-side of our HE system; there’s no doubt that some people are doing irrelevant, poorly taught degrees at the wrong universities. But they’re completely wrong to see the solution as lying in the hardly aspirational system of twenty years ago - when only 20% went to university as opposed to the 45% today - because they ignore the brutal realities of the modern labour market.