Bank holidays 'cost economy £19bn'

 
People enjoy bank holiday in 2009 People enjoying a day out on the Serpentine in London's Hyde Park on a bank holiday

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Each bank holiday costs the UK economy £2.3bn and scrapping them would boost annual output by £19bn, economists say.

The Centre for Economics and Business Research (CEBR) think tank wants them to be more spread out over the year to stop businesses "losing momentum".

This year's extra bank holiday for the Diamond Jubilee means there are five in April, May and June outside Scotland, where Easter Monday is not a holiday.

Wales and England usually have eight, Scotland nine and Northern Ireland 10.

The think tank says that if bank holidays were scrapped, Britain's gross domestic product (GDP) - a measure of the value of goods and services produced by all sectors of the economy - would be £19bn higher every year.

BANK HOLIDAYS 2012

  • England and Wales - 2 January; 6 and 9 April; 7 May; 4 and 5 June; 27 August; 25 and 26 December
  • Scotland - 2 and 3 January; 6 April; 7 May; 4 and 5 June; 6 August; 30 November; 25 and 26 December
  • Northern Ireland - 2 January; 19 March; 6 and 9 April; 7 May; 4 and 5 June; 12 July; 27 August; 25 and 26 December

It says the UK depends far more on services than other countries and that sector - with the exception of the hospitality industry - tends to work far less on public holidays.

'Utter rubbish'

CEBR founder Douglas McWilliams told BBC Breakfast: "About 45% of the economy suffers; the offices, the factories, the building sites where people tend not to go to work on bank holiday."

He said 15% of the economy, such as shops, pubs, restaurants and visitor attractions do well.

However, Mr McWilliams said that by spreading out public holidays, rather than scrapping them, people would enjoy them more.

Business can "lose momentum" when there are too many close together, he added.

But GMB leader Paul Kenny described the report as "utter rubbish", adding: "We could send kids down the mines again too and go back to working six days a week again as well.

"I'm not sure who would be in the shops, the restaurants and sports venues if we didn't have bank holidays."

British Retail Consortium director general Stephen Robertson told BBC Radio 4's Today programme the Easter holidays were good for shops, representing the start of the season for DIY and garden centres.

"We also begin to do outdoor activities, paint the house, and on top of that, if we have good weather then we have barbecues," he said.

"We socialise more and that's good for grocery shopping as well."

The CEBR points to South Korea, which has recovered rapidly from the financial crisis. Although there are more public holidays there, the think tank says different working conditions mean employee work over 500 hours more per year than British workers.

Unions have previously pressed for extra public holidays, pointing out that other European countries have more than the UK's minimum of eight.

Research published last year by Mercer HR suggested there was a statutory minimum of 14 in Spain, 13 in Portugal, 12 in Greece, 11 in France, and nine in Germany and Ireland.

It found US and Australian workers get 10 public holidays, Canadians nine, Chinese 11 and Japanese 15. However, there are regional variations in many of these countries and employment laws differ as to whether workers should be paid for these holidays.

A fortnight ago the Governor of the Bank of England, Mervyn King, warned that GDP in the second quarter of this year might shrink owing to the number of bank holidays.

Comparison of public holiday entitlement

Selected countries Minimum number of days

Source: Mercer HR, December 2011

Japan, South Korea

15

Spain, Malta

14

Portugal, Austria

13

Greece, South Africa

12

France, Italy, Brazil, New Zealand

11

Australia, Finland, Norway, Belgium, US

10

Canada, Ireland, Germany

9

UK, Netherlands

8

 

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  • rate this
    +27

    Comment number 1572.

    Those who suggest that the 8 days just be added to annual leave need to think about the real World. Annual leave can only be taken when the employer allows. Bank Holidays have largely gone the same way, but at least on a couple of times a year you can get all of the family together for a late night party and a sleep over. Choice of time off has largely gone by the board today.

  • rate this
    +9

    Comment number 1564.

    I notice a number of people have claimed this is report is an attempt to get rid of May bank holiday. Since the workers day is May 1st and this year and most other years the Early May Bank Holiday is not on that date it is just a coincidence that the 2 dates are close. It is more to do with Morris dancing, maypoles and other British traditions. Also is one of the best timed unlike Easter.

  • rate this
    +3

    Comment number 1561.

    I assume that loss of momentum means the process of shutting down and starting up again. Surely therefore it is better to have some holidays grouped together as opposed to have them all singled out? Anyway. how many paid holidays do these guys get?

  • rate this
    +188

    Comment number 765.

    I would guess that any loss to the economy as a result of public holidays is more than offset by the fact that British employers enjoy a culture that routinely demands that employees do far more work than they are paid for. Without the willingness and good will that this requires, the economy would be in a far worse state than it already is.

  • rate this
    +187

    Comment number 224.

    Surely the economy needs days to spend the money too!

    Bank holidays you already see endless queues of shoppers at the retail parks. The big stores must gross a fortune on those days let alone other attractions, people taking long weekends away etc so would also hurt other business waiting for that income.

    We already work more than many in Europe anyway.

 

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