Increase statutory paid leave
If pay is protected, increased leisure time for workers will boost demand and life satisfaction.
A new Working Time Commission should make annual recommendations to government on regular increases to annual statutory leave entitlement. This body would need to collaborate closely with the Low Pay Commission, or it could sit within the Commission itself. To reflect the fact that reducing working hours can create a virtuous circle between increasing productivity and helping to ensure that productivity gains themselves lead to social, economic and health benefits for workers, we propose the new body or Commission be given two phases to its mandate.
For the first phase, the Commission would be asked to recommend annual increases in paid statutory leave that are as large as possible, subject to not increasing unemployment. The first mandate would remain in place until government believed that the scope for a demand-side response to the UK’s productivity puzzle had been exhausted.
Once this phase was complete, the new Commission could be given a new ‘normal times’ mandate to recommend a more steady increase in statutory leave to remunerating workers in the form of paid time off consistent with sustainable, long-term increases in productivity.
During both phases, government could also use the opportunity afforded by higher paid leave to announce new bank holidays spread evenly throughout the year, helping to bring the UK more closely in line with the rest of Europe.
Policy in practice
Projects that demonstrate the benefits or may be helped by polices like this.
PR firm’s shift to four-day week has proved highly popular with staff – and the company has grown.
Advice Direct Scotland
Advice centre adopted a four-day week without loss of pay.
Staff at design company Normally have worked a four-day week since it was founded in 2014.
Tech firm offers staff a three-day weekend, all year round.
Suffolk manufacturing firm is the first business in the region to work a four-day week.
Company connecting people with self-care and counsellors trails four-day week.
250 call centre staff will take part in UK's largest four-day working week trial.