A study published by the TUC warns that working people in both the UK and the EU are at risk from the erosion of workplace rights after Brexit – especially those in low-skilled jobs.
The report ‘Could a bad Brexit deal reduce workers’ rights across Europe?’ was commissioned by the TUC from the Work Foundation. It reviews evidence on the relationship between labour standards and foreign direct investment (FDI), and it looks at a range of potential consequences for working people in Britain and the EU after Brexit.
The study finds that better labour standards can help attract foreign investment, particularly in high-end sectors, creating a ‘race to the top’ for high-pay, high-productivity jobs. But it also finds that for low-pay and low-productivity sectors, there are real risks of a ‘race to the bottom’ if countries seek to compete by cutting workers’ protections.
The chancellor has threatened to change the UK to a deregulated tax haven if a post-Brexit deal with the EU is not reached. This raises the risk that Britain may cut protections for people at work. The study suggests that this would lead to pressure on EU nations from multinationals to reduce working people’s rights in order to compete for low-skilled jobs.
TUC general secretary Frances O’Grady said: “If we don’t put strong protections for working people at the heart of our deal with the EU, Britain could become a bargain basement economy. And this will worry the EU too, as it could drive damaging competition that increases inequality.
“We’ve already seen the emergence of a low-skill, low-productivity economy that leaves many people trapped in dead-end jobs. Scrapping workplace protections, or gradually falling behind our European neighbours, would increase this trend.
“The next government must get a deal with Europe that protects current rights, like paid holidays, equal pay, and fairness for agency workers. And it must guarantee a level playing field with the rest of Europe now and in the future, so working people in Britain don’t fall behind our European neighbours.”