Employment Rights Bill: UK government cites CBR research

The UK government’s announcement of changes to the Employment Rights Bill includes a reference by Simon Deakin, Director of the Centre for Business Research (CBR) at Cambridge Judge Business School, to recent University of Cambridge research showing that stronger UK employment laws have had pro-employment effects.

The amendments, following extensive consultation, aim to increase productivity and extend employment protections to millions more UK workers “by tackling the low pay, poor working conditions and poor job security that has been holding the UK economy back”, said tI thihe announcement from the Department for Business and Trade, Business Secretary Jonathan Reynolds and Deputy Prime Minister Angela Rayner.

Labour laws boost productivity and inclusivity

The government announcement quotes Simon Deakin, Professor of Law at the University of Cambridge and CBR Director:

The research we have done in Cambridge shows that on average, strengthening employment laws in this country in the last 50 years has had pro-employment effects.  The consensus on the economic impacts of labour laws is that, far from being harmful to growth, they contribute positively to productivity. Labour laws also help ensure that growth is more inclusive and that gains are distributed more widely across society.

Professor Simon Deakin, Director of the Centre for Business Research (CBR)

A 2024 Policy Brief by Simon Deakin and Dr Kamelia Pourkermani, Research Fellow at the CBR, used a dataset which tracked changes in legislative protection for workers around the world from 1970. They used the dataset to estimate the impacts of the UK’s labour laws on 4 key economic indicators: productivity, employment, unemployment and the labour share of national income (the share of income going to wages and salaries as opposed to dividends and profits).

“We find that stronger labour protection is associated with higher employment and lower unemployment. Particular types of labour laws, including those regulating flexible working, working time, and employee representation, can have positive productivity effects,” the Policy Brief says.

The government’s announcement said the amendments to the Employment Rights Bill will support the government’s Plan for Change, “by putting more money in people’s pockets, improving working people’s day to day lives and delivering real life improvements felt by working people”.