Earlier this year, Business Secretary Kwasi Kwarteng cancelled a review into how EU employment rights and protections could be changed after Brexit, stating that “we’re not interested in watering down workers’ rights.” Key areas that had been within scope for change include working time regulations and holiday and overtime pay entitlements. Nevertheless, the creation of a new Taskforce on Innovation, Growth and Regulatory Reform in February indicated that regulatory changes in this area are still very much on the agenda for Government.

Last week, the Taskforce published its recommendations to the Prime Minister. Although the report authors argue that “this project is not a simplistic ‘bonfire of red tape’”, a few pages later they make the case for a return to the principles of the Coalition Government’s Red Tape Challenge and the Deregulation Act of 2015, which weakened health and safety laws and the powers of employment tribunals. Central to this is the seemingly arbitrary ‘one in, two out’ principle, in which Ministers must scrap two regulations every time they wish to impose a new one.

The report focuses on innovation and competition, and argues that new regulations could have potential negative impacts on businesses, in terms of ‘burden and cost’. However, not all businesses are opposed to regulation. In fact, sensible regulation is often welcomed by the business community as it facilitates fairness, a key component of competition, by ensuring that all are playing by the same rules.

Moreover, regulation can actually encourage and facilitate innovation. For example, environmental regulations, while initially creating compliance costs for businesses, also create an incentive for the development of new eco-friendly processes, products and technologies. Indeed, the UK Government has committed £1 billion to helping businesses develop the green technologies needed to tackle climate change, via the Net Zero Innovation Portfolio. Therefore, it is clear that Government views regulation as an opportunity, rather than restrictive red tape, in some areas.

Framing employment regulation in negative terms is unhelpful, and significantly, out of step with how many employers view the issue. In their contribution to the Taylor Review of Modern Working Practices, the CBI highlighted the importance of spreading good working practices throughout the economy, and noted that it is incumbent on business to engage their employees and give them voice in the workplace.

Instead of pursuing a deregulatory agenda, government should prioritise strengthening employment regulations as part of a strong economic recovery that benefits all. As recommended in our recent briefing, Standing at a crossroad: Brexit and the future of workers' rights, this broad package of new and improved workers’ rights could include the right to disconnect, ensuring transparent and predictable working conditions, improving conditions in the gig economy, increasing sick pay coverage, and crucially, stronger enforcement of rights.

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