ABSTRACT
The above quotation from the Mr Waldegrave neatly summarises the philosophy underpinning the so-called ‘Anglo-Saxon’ approach to labour market policy pursued by successive Conservative governments in the 1980s and 1990s. Employment regulations (i.e. job protection laws, wages councils which set minimum rates of pay in a limited number of sectors, and legal immunities for trade unions) together with overly progressive tax systems and generous welfare protection, were highlighted as the fundamental causes of structural unemployment. A policy of deregulation was thus pursued to remove these so-called ‘rigidities’, in the belief that this would make the British labour market more flexible and adaptable and able to sustain a lower rate of joblessness.2 Moreover, while the policy objective of reducing structural unemployment is in essence distinct from that of improving the competitiveness of the British economy, it is also often suggested that labour market reforms have contributed to increased productivity and played a role in attracting inward investment.3
