For Immediate Release | For further comments or to arrange an interview, contact Charlotte Bowyer at firstname.lastname@example.org / 07584 778 207 Commenting on Ed Miliband's banning of zero-hours contracts, Director of the Adam Smith Institute, Dr Eamonn Butler, said:
Forcing firms to give employees a regular contract after 12 weeks is effectively abolishing zero hours contracts for 90% of the 1.8m on them, and it would harm the very people it is intended to help.
The UK's economic success is founded on labour market flexibility, and politicians need to be very careful before messing with it.
About two thirds of people on zero-hours contracts are happy with the hours they get—limiting the contracts they can sign hamstrings not just the firms that employ them but their own employment options.
On top of this, we'd expect this labour market straitjacket to cut, rather than boost, productivity. The UK's productivity troubles are real, but they're also so hard to diagnose that the issue is known as the 'productivity puzzle'.
The UK's labour market flexibility is the key reason we have been able to weather such a sharp recession and slow recovery while nevertheless hitting the highest ever employment level and rate. Chipping away at this is dangerous and counterproductive."
For further comments or to arrange an interview, contact Charlotte Bowyer at email@example.com / 07584 778 207
The Adam Smith Institute is an independent libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.