The Confederation of British Industry (CBI) has warned that proposals in the EU draft employment agencies directive could have a serious impact on the UK economy.

More temps work in the UK than in any other EU economy, meaning the proposals – which include equal pay and pension rights – could have a particularly large impact here, the CBI claims.

Digby Jones, the CBI’s director general, has written to the European Commission’s president, Romano Prodi, complaining that the directive would damage employment agencies in the UK.

Jones told the BBC’s Today programme that the directive could damage labour market flexibility in the UK.

He said: ‘It’s depressing that Europe decides it is going to try and bring everyone down to some sort of low common denominator… it’s socialism coming out of Brussels.’

James Reed, CEO of Britain’s largest recruitment agency Reed, believes the draft directive is bad news all round.

He explained: ‘It is bad news for individuals, particularly for disadvantaged people who find temping the best route to get into the workforce. And it is bad news for the UK economy, where the flexible labour force has been a huge asset keeping unemployment at the lowest level in Europe over the last decade.’

The TUC estimates that almost half of temporary workers get paid less than permanent staff.