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How a day at the seaside could solve the British productivity puzzle

Simon Goodley
Photograph: Andrew Matthews/PA

At the memorial service given for Denis Compton in 1997, the great England cricketer’s former county captain delivered a eulogy. In it, JJ Warr regaled the Westminster Abbey congregation with tales of sporting derring-do, but also talked about the off-field work ethic of his old friend during the introduction of the three-day week in 1974. Warr recalled asking Compton what he thought of Ted Heath’s new regime, when the batsman supposedly replied: “I am not going to work an extra day for anybody.”

The tale is an obvious favourite among Lord’s members during those brief passages of play when consciousness calls. But what is rarely discussed is how the anecdote suggests there was an extra talent in Compton’s locker, aside from the colossal sporting gifts that brought him a Test batting average of 50, league and FA Cup winners’ medals with Arsenal, and a putative world record for running out teammates. Compton, it seems, may also have been ahead of his time as a right-on, left-leaning economist.

The debate about the economic effects of shortened working weeks will re-emerge over the next few days with Monday’s bank holiday – a collective day off that often provokes missives from right-of-centre thinktanks about how much these jollies cost the nation in lost GDP.

In 2012, the Centre for Economics and Business Research (CEBR) estimated the average bank holiday left the UK with a bill for £2.3bn and asked: “Do we really need so many?”

The answer to that question appears to be: yes. Or, at least, more paid days off may stop UK workers being so stubbornly unproductive.

It looks as though the demand side accounts for up to half of the collapse in productivity growth we've seen

Alfie Stirling, NEF

Analysis in 2017 by the economics blog Stumbling and Mumbling suggested that, across 35 OECD nations, there was a strong correlation between countries working less and being more productive. Earlier this month, the New Economics Foundation also argued that giving workers more paid holiday would help drive up spending power in the whole economy and could give firms a greater incentive to raise their productivity, as confidence about demand increased.

Alfie Stirling, head of economics at the NEF, said: “For 10 years the UK has been trying to fix the productivity puzzle on the supply side – the way we make things, rather than the level and nature of our spending. But it looks as though the demand side accounts for up to half of the collapse in productivity growth we’ve seen since the financial crisis.

“Raising demand by giving people more paid time off to spend their wages should be part of solving the UK’s productivity problem.”

Douglas McWilliams, the deputy chairman of the CEBR, reckons the effects on GDP of bank holidays are now much lower than the £2.3bn his firm estimated in 2012, as we have fewer factories that shut for the day and work is more flexible. He has even written about how we work 10% more than the Dutch, but have a lower GDP per capita than the Netherlands, and reckons an increase in our productivity could pay for more days off.

Still, McWilliams warns that more unpaid – rather than paid – time off work would result in a lower tax take, which brings us back to another Compton story of unremunerated downtime.

The cricketer used to dump unopened letters in a suitcase and when a friend did him the favour of opening the mail, two notes from a national newspaper were unearthed: the first offering Compton a lucrative column, the second withdrawing it because he’d failed to reply.