It is ridiculous to rubbish all regulation

Following in Open Europe’s footsteps, their fellow bastion of right-wingery the Institute of Directors (IoD) has brought out a paper claiming that Britain’s labour market is becoming much less flexible as a result of regulation at national and EU level.

The IoD cites 10 major employment regulations which have been introduced by Labour since 1997. No doubt they would like to repeal them all. These include the minimum wage, rules on maternity and paternity pay, rights for part-time and fixed-term workers, increased employee involvement under the EU Works Council Directive and anti-discrimination legislation.

But these rules prevent exploitation at work and ensure some level of work/life balance. Put bluntly, they should exist in any society worth the name.

However, the IoD's claims about the damage such rules are causing to our economy are somewhat undermined by the tables they publish which reveal that the British labour market has a far higher score on the Indicator of Labour Market Adaptability (ILMA) than it did in 1997 and three times higher than 1992 when the Tories were in power. Meanwhile, there is a corresponding increase in the flexibility of the supply of labour.

The IoD, of course, revels in its role as an 'unacceptable face of capitalism', but they share the same blinkered attitude as Open Europe: regulation = bad, deregulation = good. But objectively, regulation is not a zero-sum game. It is about finding a balance between work-place rights and social protection and flexibility for businesses and employees. And regulations don't always cost money and can sometimes even save money. Unintentionally, the IoD research indicates that this balance, with the odd exception, has been found.