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Peter Mandelson, the secretary of state for business and enterprise, has been criticised by one of his predecessors, Patricia Hewitt, after he suggested that the government may try to ease the impact of the recession by delaying plans to extend rights to flexible working and better maternity leave.
Mandelson floated the proposals as the government and the Conservatives offered competing packages to lessen the impact of the recession, including more government borrowing, help for small businesses, and restraints on repossession for defaulting homeowners.
Gordon Brown said his government's mission would be to "bring the same focus and determination to the task of safeguarding jobs and homes and small businesses, as we have done to avert the threatened meltdown of financial systems".
The Department for Business had been due to extend the right to ask for flexible working from parents with children under six to parents with children up to 16. It said it was right to think again at a time of economic uncertainty.
But Hewitt opposed the review, saying: "I understand the need and desire of any new secretary of state to look at what is going on in their department, but I do not think people should see flexible working as a cost to business, and therefore something to be cut back on. It can be of real benefit to employers."
She added: "When it comes to flexible working, and people reducing their working hours, actually that can be a real help in times of economic downturn. It makes more sense for an employer to say to the employees 'would any of you like to reduce your working hours?' instead of thinking 'who am I going to make redundant?"'
The review was welcomed by the CBI, but the TUC general secretary, Brendan Barber, said: "Postponing a simple right to request flexible working would not save a single job in the small business sector. If such a request harms the business, the owner can say no. This would be an astonishingly irrelevant response to the severe economic downturn that we face and, in addition, would run the risk of sending a message to working parents that the government is not on their side."
The Treasury chief secretary, Yvette Cooper, also sounded lukewarm. Speaking on GMTV, she said: "What Peter Mandelson has been doing is looking at a whole range of ways in which we can support small businesses, help them through what are very difficult times as a result of what's going on in the global economy.
"What we clearly can't do, however, is do that in a way which makes life more difficult for people who are working for businesses, people who are worried about their jobs, and people who need flexible working, people who need additional support at work."
Cooper has instead been emphasising that banks should act with greater restraint before repossessing the homes of defaulting mortgage holders. The Council of Mortgage Lenders is predicting that repossessions will rise to 45,000 this year up from 26,000 last year. The government has been told to speed up payments to small businesses, but some small businesses also want an end to the government being given first claim on debt when a firm goes bankrupt.
The Conservatives offered a small business package centring on a 1p cut in employers' national insurance for at least six months for any small business with fewer than five employees. Excluding the self-employed, there are 2.3 million workers in businesses with fewer than five employees. A small business with four employees and an annual wage bill of £150,000 would save more than £100 a month.
The Tories are also proposing that businesses with less than 250 staff should be able to defer paying VAT for six months. The cost to the Treasury would be £225m, but the Tories claim this cost could be met from earlier Tory funding plans.
- Peter Mandelson
- Economic policy
- Recession
- Market turmoil
- Work & careers
- Work-life balance
- Maternity & paternity rights
- Children
- Equality
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