To spur employment and business investment we could always copy Italy. Then again, maybe not. Italy has hire and fire laws that allow small businesses to dispense with staff almost at will. These laws go back to the 1970 Workers Statute and combine with rules allowing firms to keep staff on a succession of short term contracts.
Adrian Beecroft, the savvy private equity pioneer who has proposed introducing similar laws for the UK in a report for the government, wants to give UK firms with up to nine employees the option of bypassing the rules on dismissals.
No more protracted warning procedures. Only statutory redundancy pay as a maximum compensation when you leave the premises.
Rome has a slightly higher threshold. It forbids companies with more than 15 employees from firing workers without just cause. Firms with fewer than 15 staff can do what they like.
Over the longer term, a two tier system has encouraged firms to stay small. In Italy there are virtually no large companies other than those wholly or partly owned by the state.
It is famous for its army of small textile, food and manufacturing firms, especially in the north west, that constitute the powerhouse of the economy. But not anymore. Much of the country's reliance on corporate minnows, which lack the resources to compete with the new Chinese competition, is blamed on the two tier employment laws that encourage firms to stay small.
In March Italy's new prime minister Mario Monti said the hire and fire culture among small firms amounted to "bad flexibility", arguing the laws penalise young people who cannot start a family or buy a house while they dance to their employer's whims.
Monti has attempted to tackle tougher targets that can be found in large unionised firms that are dominated by well protected older workers. It is proving difficult, but at least he can claim a strong rationale.
Beecroft says small firms are unable to keep up with the complexities of legislation governing workers rights. So a bonfire of petty rules is needed. But while there are instances around the country of employees attempting to exploit their legal protections, it is not a problem affecting the UK's ability to grow.
If anything, cutting employment rights will undermine the confidence of millions of workers to spend right now (for fear of losing their job) and hurt the recovery.
If Germany is the manufacturing success story we should want to copy then we had better think about giving workers more rights. More rights to training, more rights to parental leave, better sick leave, and guaranteed pensions.
