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."