BUSINESS leaders have condemned Ed Miliband’s plan to prevent employers paying low wages to migrant workers, calling it “misguided,” after a day in which both the Prime Minister and leader of Ukip Nigel Farage also toughened their rhetoric on migrant labour.
The Labour leader vowed to close an opt-out allowing employment agencies, which can employ high numbers of foreign workers, to circumvent EU laws on equal pay for contract staff.
The Swedish derogation allows firms to waive the equal pay requirement of the EU Agency Workers’ directive for staff permanently employed by the umbrella agency.
James Sproule, chief economist at the Institute of Directors said of Miliband’s plan: “It’s a bad idea all round.” He added that any plan to restrict flexibility in the job market would be bad for small firms and would boost unemployment. “The initial response to this from employers would be to employ fewer people on higher wages, and over time new jobs wouldn’t come up in that sector,” he said. “Miliband is saying ‘I know whats best for you, worker’ and he doesn’t. It may be that people won’t pay very much for that service to be done.”
The Confederation of British Industry also voiced concern. “The flexible labour market in this country has saved jobs and kept our economy going during tough times. Undermining this flexibility would put the very system which has kept unemployment down at risk,” chief policy director Katja Hall warned.
David Cameron also emphasised his increasingly tough stance on migration yesterday. Speaking to Andrew Marr during an interview on the BBC, the Prime Minister said that the government would tackle employers paying less than the minimum wage. He also said that he was opposed to UK child benefit payments being sent out of the UK to families living in other EU countries, suggesting that this and other proposed restrictions to the free movement of people within Europe could be achieved through Cameron’s proposed renegotiation of the UK’s EU membership.
He also suggested he could veto future EU accessions unless tighter migration restrictions were in place.
Both Labour and the Conservatives have lost public support for their previously pro-immigration stance, allowing Ukip leader Nigel Farage to boost support for his party. Yesterday Farage tweeted: “David Cameron seems to be trying to sound like me. But the thing is, I believe in what I say.”
The Ukip leader voiced his support for UK-born workers, citing the construction industry as one of the hardest hit by low paid overseas labour.
“There is no question that it’s pushed wage inflation down; it’s helped big companies and big corporations and big landowners to make bigger profits – no argument about that,” he said of low pay. Farage also called for economic migrants to prove they are capable of earning more than £27,500 per year before being allowed into the country. But the IoD’s Sproule called Farage’s proposal “absolutely insane,” adding that reducing flexibility in the workforce would increase unemployment.
During an interview on Sky News yesterday the Ukip leader also said that although the reasons were different and the pace of immigration was now far higher, the “basic principle” of Enoch Powell’s River of Blood speech was right: that immigration could change neighbourhoods beyond recognition, raising local tensions.