Norfolk FSB chairman welcomes Elizabeth Truss’ call to rebuild the economy the German way

A local Federation of Small Businesses chairman has welcomed a call by a group of MPs to exempt small businesses from dismissal rules.

The Free Enterprise Group, led by South-West Norfolk MP Elizabeth Truss, is urging Chancellor George Osborne to follow Germany's example in giving small businesses more freedom with its labour.

In a paper called 'A decade of gains - Learning lessons from Germany', Ms Truss argues that Britain has much to learn from Germany, especially on jobs and skills and that Germany now has the lowest rate of unemployment in Europe with youth unemployment at 8pc, down from 16pc in 2005.

Mid-Norfolk chairman of the Federation of Small Businesses Martin Lake said: 'If we are to avoid the kind of economic disaster that is befalling Greece (and may well spread further) I think it is absolutely key that micro businesses here in the UK are enabled to employ the best person for the job, without the fear of legal challenge. There is simply not the capacity within micro businesses to 'carry' a poor performer, or to fight an unfair dismissal case which I know puts a lot of micro business owners off hiring people in the first place.

'If Britain is to be Great again it must produce products or services at a quality for which people are prepared to pay, other-wise watch happens in Greece and brace yourself.'

As well as changing the rules on dismissal, Ms Truss praises a German system which created new and more flexible contracts called 'minijobs' and 'midijobs' in Germany in 2003. The report said that minijob-holders were paid a maximum of €400 a month. Instead of cumbersome tax and social security contributions, employers pay a flat rate of 30pc tax to a single body. For private households this is 12pc. Meanwhile midijobs give a flexible salary of between €400 and €800 with varying levels of contribution.

Because there is no limit on the number of hours a minijobber can work, a single point of contact and a single flat-rate payment, employers find it easy to administer.

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