Labour Market

Government must remove employment red tape to get unemployment down


Economic Theory
Press Release

Prof Philip Booth comments on David Cameron's 'popular capitalism' speech

Mark Littlewood comments on the latest unemployment figures

Commenting on the latest unemployment figures, Mark Littlewood, Director General at the Institute of Economic Affairs, said:

“These depressing figures indicate that the government needs to remove the barriers which are preventing companies taking on new staff. In a grim economic climate, businesses often see taking on extra employees as expensive and risky. If things don’t work out with a new worker, it is time intensive and costly to dismiss them. This is tempting many companies to squeeze more hours out of their existing workforce rather than take on new recruits.

“The recent increase in the national minimum wage may have been well-intentioned, but it is also wrong-headed. There is a grave danger that for young people in particular, we are removing the first few rungs on the career ladder and are condemning them to the unemployment scrapheap.

“The government should also look at liberalising the law surrounding taking on staff as self-employed consultants. This would make it more attractive – especially for the SME sector – to take on new workers with minimal risk.

“We presently run the risk of granting fairly generous rights and protections to those in employment, at the cost of locking out many hundreds of thousands of people from securing productive work.”

Notes to editors

To arrange an interview with Mark Littlewood, IEA Director General, please contact Stephanie Lis, Director of Communications: 020 7799 8909, [email protected]

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

The IEA is a registered educational charity and independent of all political parties.