Investing in America is more attractive than Britain because it is easier to sack people, the boss of a FTSE engineering company has said.
Simon Peckham, chief executive of Rosebank Industries, said the UK's shift towards stronger employment rights – even for staff who underperform – was making it harder to overhaul struggling businesses.
Partly because of this, the City veteran said his company had decided to focus on investing in struggling US manufacturing businesses instead.
He told The Telegraph: "They have one other very big advantage, where we are going in the opposite direction.
"In the United States, every single employee that we hire is 'at will'. So, literally, you can fire them the next day [after acquiring a company].
"Now, that would be appalling behaviour and I'm not suggesting we would do that in any way, shape or form. We treat people properly.
"But that flexibility gives you the ability to move quickly, to make changes to businesses in a way that you cannot do in the UK and you cannot do in Europe.
"The UK, if anything, is moving towards the European model ... which is to try to protect existing workforces.
"But if you do that, you actually discourage employment and you make restructuring more difficult."
Mr Peckham is one of Britain's most successful turnaround investors, going by the mantra of "buy, improve, sell".
He previously ran Melrose Industries , which invested in a string of UK firms over 20 years and returned some £8bn to investors.
It also became an occasional magnet for controversy as it was criticised for breaking up historic but underperforming businesses such as GKN.
He and fellow Melrose executive Christopher Miller then left Melrose in 2024 to launch a new turnaround vehicle, Rosebank Industries, with a focus on US manufacturing and industrial companies.
Its acquisitions so far have included equipment supplier CPM and precision components maker MW Industries.
Along with more flexible employment laws, Mr Peckham said the attractions of America included its bigger single market and a broadly more positive attitude to wealth creation.
"Basically, people want you to make money, and they want to allow you to change businesses if they're not doing well," he said.
"So for those reasons, we are much more focused, and have been, in the United States."
He contrasted this with the UK, where Labour ministers pushed through employment rights reforms last year despite warnings from businesses that the rules would discourage hiring and damage the economy.
Andy Burnham, who succeeded Sir Keir Starmer as Prime Minister in July, has expressed an ambition to reverse Margaret Thatcher's policies to boost the economy in the 1980s.
Mr Peckham claimed he was not a "political" individual and hadn't voted in the last election, but said: "I'm 64 years old, and I can remember the 1970s.
"We had three-day weeks and constant strikes – I don't remember it being a fantastic decade for British industry and for the wealth of the UK.
"So the idea of going back to that stupidity is something I actually find deeply depressing."
A government spokesman said: "We're bringing employment rights into the 21st century by helping to create a fairer labour market that works for businesses and employees alike.
"People deserve secure work, fair pay, and opportunities to progress. Businesses deserve to compete on the quality of what they offer and not be undercut by employers who cut corners on workplace practices."
