Nick de Bois is the former MP for Enfield North. He was a member of the Government’s Serious Crime Task Force until his appointment as Chief of Staff to Dominic Raab at DExEU. He is the author of Confessions of a Recovering MP.
A traditional conservative response to Labours promise to introduce a 4-day week would be to rubbish it as unworkable, and fraught with difficulties, particularly for small business.
In short, essentially a classic left wing intervention to implement unrealistic costs on the enterprise economy in a clumsy attempt to win worker votes. After all, four days’ work for five days’ pay – what’s not to like?
However, before Conservatives rush to dismiss this latest policy announcement as economic madness, it’s worth noting Labour’s pitch is not just an economic one. It is also an appeal to a fast-changing work ethic in employees that employers up and down the country will recognise.
But first, the economic case for the four-day week deserves examining. On one point that both left and right will agree is that UK productivity is woeful, and John McDonnell argues a reduced working week will solve that problem.
Productivity has indeed basically flatlined since 2007, and the UK remains way behind our fellow group of the worlds seven leading economies – the G7. This in part explains why wage growth is poor, despite welcome recent improvements.
It means profitability of ‘UK plc’ is less than it should be, and that our workforce is broadly under-achieving – although this should not be confused with being lazy, as so many political and media commentators imply.
The upside to this grim summary is that by improving productivity we are presented with a win-win for government, business and employees.
For example, according to the 2017 Stoddart Review a one per cent productivity gain would represent, across the economy, an additional £20 billion national output. Translated further, that would represent a reduction in annual deficit of £8 billion (it currently at £17 billion) and add another £250 a year to an average pay packet, whilst companies’ profits could increase by £3.5 billion.
The key question for McDonnell’s approach is: would a widespread, top-down imposition of a four-day working week deliver that increase in productivity? In short, the answer is almost certainly no.
This is because it cannot and will not work on a uniform basis across all businesses and workforces, and the strain on the public sector would be huge. The evidence clearly supports that contention.
Advocates of the reduced week often point to the success of Perpetual Guardian in New Zealand. They manage over £200bn of assets, and the CEO argues that the policy has improved staff wellbeing and dramatically improved productivity.
But at the other end of the scale earlier this year the Wellcome Trust rowed back on its plans to implement a four-day working week, announced to much fanfare in April. They gave the not-unreasonable explanation that it became evident to them that work could have become harder for employees in back-office and support functions, such as IT, finance, and human resources. Two large organisations, two very different responses.
Even less ambitious programs for reducing the number of working hour have met huge difficulties. An example is Gothenburg’s municipal local government, which trialled a six-hour working day (reduced from eight). They did see significant wellbeing advantages in healthcare workers, but recognised employers would struggle to meet the costs of reducing working hours yet maintaining a 24/7 healthcare provision.
“Could we do this for the entire municipality? The answer is no, it will be too expensive,” said Daniel Bernmar, the Left Party councillor responsible for running Gothenburg’s elderly care in 2017. Imagine the financial challenge of introducing a four-day working week into our biggest employer: the NHS.
Labour’s proposal mandating a four-day working week through a complex series of measures simply won’t be right for every business or organisation, as the Wellcome Trust and others have found. It is a recipe either for chaos or for a massive climbdown should the Opposition ever come to power.
What should the Conservative response be? Both business leaders and employees are not stupid and will recognise the sop to employees Labour are making for what it is, an election bribe. But equally, when Labour talk about building a society where we don’t “live to work, but work to live” it will strike a chord with millions of people.
Therein lies the answer as to how Conservatives should respond to today’s Labour announcement: advocate a progressive and light-touch regulatory approach to flexible working that goes way beyond the current focus on maternity and paternity rights.
It may be politically attractive to focus on rights for parents, and we have done some great work from which to build on. Yet it is plainly inadequate to stop championing flexible working there and Conservatives, not Labour, should be filling the policy vacuum on the issue.
Such a move makes both economic and political sense. It is striking, for example, that flexible working is presently pretty much the preserve of white-collar workers.
Conservatives would do well to recognise that the relatively untapped benefits, both for employees and national productivity, of the blue-collar worker being able to enjoy flexible working are substantial and politically attractive. As workforce management consultants Quinx identified in their report “Powering the Power House“:
“If a greater proportion of UK employers took steps to address barriers to the recruitment, retention and productivity of workers in manual and elementary service roles in the as yet relatively conservative Blue Collar workplace, estimates show up to 7.6bn of productivity growth”.
That’s quite a contribution to the productivity gap Britain faces.
Both attitudes and the compotion of the workforce have changed dramatically in the last decade, and whilst some employers have been slow to recognise this political parties have been even slower. It is time for Conservatives to take action.
As Karen Mattison from leading employment specialists Timewise noted after the publication of their 2018 employee survey:
“The fact that flexible working has been seen as a women’s issue has not done women or businesses any favours. Today’s new research shows once and for all, that flexible working is a preferred way of working for both men and women at all stages of their working lives.”
Most strikingly the Timewise employee survey also noted, and many employers will recognise:
“Today’s workforce not only want flexible working they expect it. It’s time for businesses to get smarter and use flexibility as a tool to attract and keep the best people. Those who lag behind in adapting how they hire, will risk losing out on millions of skilled workers.”
Government, take note.
Labour’s crude, authoritarian approach to flexible working, with its focus on a four-day week, may be politically attractive to some. But it runs the risk of introducing a simple left-right divide on that single issue, and we fall into Labour’s trap if our response is to dismiss it out of hand.
A Conservative response can be more nuanced and more practical if we become advocates for progressive, flexible employment practices. There is an audience ready and waiting to respond positively to this message, should we chose to offer it.
Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com