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Bank holidays ‘cost economy £19bn’

by: Investment Week
  • 10/04/2012
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Bank holidays ‘cost economy £19bn’
Economists have suggested scrapping bank holidays in the UK in order to boost the country's struggling economy by as much as £19bn a year.

While most of us look forward to the extra days off, the Centre for Economics and Business Research (CEBR) said they should be more evenly spread out across the year to stop businesses “losing momentum”.

In 2012, including May Day and the Queen’s Diamond Jubilee, there will be five holidays between April and June in the UK, although not in Scotland where Easter Monday is not a holiday.

Across the whole year, England and Wales will typically have eight, Scotland nine and Northern Ireland 10.

The CEBR said each holiday cost the UK economy £2.3bn, totalling around £19bn across a normal year.

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.

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 did not 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.

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

While England will this year see nine bank holidays, people across the country lag well behind other nations.

Below is a table showing the countries with the most bank holidays.

Countries                                        Minimum days entitlement

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

Source – Mercer HR December 2011

Upcoming holidays include the May Day holiday on 7 May, Spring Bank Holiday on 4 June and and the Queen’s Jubilee on 5 June.

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