A growing political consensus on new employment red-tape risks harming the UK's economy, a think-tank is warning

Mark Sands
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The UK will head to the polls on 8 June. (Source: Getty)

A growing consensus on harsher employment rules may hit the economy post-election, a new study has claimed.

The Institute for Economic Affairs is cautioning that both major parties are offering more red-tape, with the Conservatives promising extended care leave and restrictions on zero-hours arrangements.

Labour is offering an outright ban on non-traditional contracts, an increased National Living Wage, maximum pay ratios and increased union powers

And the IEA is warning that the costs of further regulation will fall on consumers and workers, rather than businesses.

Read more: Corbyn's plan to hike corporation tax is already under fire

In its paper, "Working to Rule – The Damaging Economics of UK Employment Regulation", the IEA said that the UK would instead benefit from a substantial programme of deregulation.

"We already have a much more highly-regulated labour market than was the case ten years ago, with the national living wage, pension auto-enrolment, the apprenticeship levy and increasingly irksome and costly procedures for recruiting non-EU workers," report author professor Len Schackleton said.

"At a time when European countries such as France and Spain are trying to cut back on regulation, and we face all the uncertainties of Brexit, we should not be imposing yet more restrictions on job creation."

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