By Daniel Hunter

The Institute of Directors commends Ed Miliband’s acknowledgement in his speech today (Thursday) that the social security system needs reform.

But his criticism of employers — instead of focusing on the role they play in driving the economy — will not help to create jobs and reduce the welfare bill.

“We welcome Labour’s new focus on controlling costs in the welfare system, although the money spent on individual benefits needs to be targeted as well as a general cap," Simon Walker, Director General of the Institute of Directors, commented.

"More worrying was Ed Miliband’s decision to characterise business as part of the problem. The private sector generates tax revenue to pay for public spending and employs over 24 million people, nearly five times as many as the public sector.

“Ed Miliband’s specific criticisms of business are flawed. His comments on the minimum wage grossly exaggerate the scale of the problem. Only eight employers have been convinced of offenses under the National Minimum Wage Act, and the number who have been forced to pay money owed to staff is tiny (72 in 2011-12).

"It is illegal for job agencies to discriminate in favour of foreign workers, and they should be prosecuted in the limited number of cases where this happens. He may dislike zero-hours contracts, but they are a flexible form of employment which some businesses have been forced to adopt because of the inflexibility of the UK labour market.

“Instead of castigating businesses, the Labour Party should be looking to simplify and reduce our burdensome tax and regulatory systems, which are holding the private sector back from expanding and taking on more staff.”

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