3 May 2019

More bank holidays would mean less freedom for workers


As you read this, I hope to be stood outside a pub, a pint of cider in my hand and the evening sunshine on my face enjoying the start of a long weekend. Many others will also be enjoying this moment. Millions use the bank holiday as an opportunity to travel, spend time with friends and family and get jobs done that they otherwise don’t have time for. Jeremy Corbyn thinks that they are such a good idea that he would introduce an extra four each year if Labour got into power.

It isn’t difficult to understand the appeal of four extra days off work. But are they really a good idea?

First, let’s look at the economic impact of the proposal. It was pointed out by Corbyn that four extra bank holidays would help boost the economy. It’s true that bank holidays are good for some sectors, especially pubs and restaurants, but this boost is not spread across all sectors. The CEBR calculates that while the 15 per cent of the economy including the hospitality industry does benefit, approximately 47 per cent of businesses suffer. In fact, the total annual cost to the UK economy from bank holidays is almost £19 billion a year.

We also have historical evidence of the economic impact of an extra bank holiday. Back in April 2011, we were given a day off to watch William and Kate tie the knot. While an excuse for me to avoid revising for finals was welcome, it is estimated to have cost the economy between £1.2 billion and £6 billion. The bank holiday in June 2012 to commemorate The Queen’s Diamond Jubilee costed and estimated £1.6 billion by even the most sympathetic estimates.

So, the economic argument against introducing more bank holidays is clear. But of course, it is not just about money. The UK has far fewer public holidays than other countries. England and Wales have 8, Northern Ireland has 10, whereas France has 12, Spain has 14, and Japan has 16. Furthermore, the Centre for Economic Performance at LSE have found that introducing more bank holidays might improve the UK’s well-being.

Besides the fact that economic growth is the driving force behind improved living standards, improved well-being is obviously a benefit too. But it is not clear that we would all equally benefit from having more time off. The new public holidays would land on March 1, March 17, April 23, and November 30. These are all at times of the year in which the weather is worse and will typically take place mid-week. Workers might therefore be forced to take a day off in rainy March or cold November. What is more, the ones in March and April are close not only to each other, but also to other bank holidays and could cause stress and disruption to the routines of schools and families with young children rather than improve standards of well-being.

It would also cause disruption for those on low wages. Bar staff, kitchen assistants and waiters are expected to work more demanding and more demoralising hours on bank holiday weekends and again, those with young families can find it especially difficult to find childcare when everyone is off.

It is important to ensure that workers are not being exploited by unscrupulous employers and holidays can do a lot to improve working situations. However, instead of introducing more bank holidays, the government should give people more flexibility in deciding when to take time off.

In most roles, a worker is entitled to 5.6 weeks’ paid holiday a year and employers can choose to include bank holidays as part of this annual leave. This clearly represents a cost for businesses, who are paying their workers not to work. As such, they have to factor it into their finances and their savings trickle down into lower wages for employees.

But what if you do not want to take 5.6 weeks off work and would prefer to earn more money? Or what if you’re financially secure and would prefer to take more holiday? In the majority of cases, the answer to these questions is, tough luck.

It is the government that prevents workers and employers from negotiating a contract that takes into account individual worker preferences. The same restrictions can be found in Sunday trading laws. Although many enjoy those extra hours off on a Sunday, not everyone does. Some people would rather work long hours on a Sunday if it meant that they earned more money.

Increased flexibility regarding working hours and holidays could allow those on the lowest incomes to increase their wages and would potentially create a huge improvement to their standard of living.

Bank holidays are therefore economically harmful and rather than introducing more of them, the government should abolish them entirely. The rules about when and for how long people can work will inevitably lead to lower wages, a problem that greater worker flexibility can naturally resolve. Not only would it improve an economy and raise wages, but it would focus these benefits primarily on those with the lowest incomes.

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Ben Ramanauskas is a Policy Analyst at the Taxpayers' Alliance.