Adam Smith Inst - Theresa May is trying to turn us into Italy
In response to Theresa May's pledge of a raft of new European-style workers regulations, as well as a crackdown on the gig economy, the ASI's head of research damned them as risky.
Ben Southwood, Head of Research at the Adam Smith Institute, said:
Theresa May’s decision to copy Ed Miliband’s continental-style labour laws risks continental style unemployment and stagnation.
One of the British economy’s greatest strengths is its flexible labour market: it is easy to hire and fire workers, and when you do, the terms are simple and lightweight. It is this flexible labour market that has allowed us to get unemployment down to 4.7%, and employment up to a record high, despite a historically slow recovery around the world.
And it is this flexible labour market that has allowed “gig economy” employers like Uber, Deliveroo and Airbnb to flourish here, completely changing markets with new innovative products. Clamping down on this kind of work will make it harder for British firms to experiment with new business models in the future and act as a drag on innovation at a time when we need all the entrepreneurship we can get.
Look over the channel where countries ban new entrants like Uber, and cynically regulate away their business models, and you find 10, 20, 30% youth unemployment in rigid labour markets that cannot deal with shocks. We don’t want to emulate that here.
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