53
Hasta la vista, baby
Will the end of PPI
payouts put the UK
in economic peril?by
PI
UK
l?Savour a day at the seaside – it could
solve the British productivity puzzle
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
his old friend’s off-fi eld work ethic
at the time of the three-day week in
1974. Warr recalled asking Compton
what he thought of Ted Heath’s new
regime, to which the batsman sup-
posedly replied: “I am not going to
work an extra day for anybody.”
The tale is an obvious favour-
ite 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, m ight 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 tomorrow’s bank holiday
- a collective day off that often pro-
vokes 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) esti-
mated 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.
Analysis in 2017 by the econom-
ics blog Stumbling and Mumbling
suggested that, across 35 OECD
nations, there was a strong correla-
tion between countries working less
and being more productive. Earlierthis 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
fi rms a greater incentive to raise their
productivity, as confidence about
demand increased.
Alfi e Stirling , head of economics at
the NEF, said: “For 10 years the UK
has been trying to fi x the productiv-
ity 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 collapsein productivity growth we’ve seen
since the fi nancial crisis.
“Raising demand by giving peo-
ple 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
fi rm estimated in 2012, as we have
fewer factories that shut for the day
and work is more fl exible. 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 pro-
ductivity 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 fi rst offering Compton a lucrative
column, the second withdrawing it
because he’d failed to reply.Economists have long
argued that our bank
holidays are bad for the
economy. Turns out the
opposite may be true,
writes Simon Goodley
Agenda
Postscript Vital statistics
Hong Kong’s richest family is to
buy the 220-year-old pub and beer
company Greene King for £2.7bn,
the equivalent of £1m for every one
of its 2,700 pubs, restaurants and
hotels. The deal adds to a stable of
UK businesses that form part of the
empire controlled by Li Ka-shing ,
the 91-year-old tycoon who also
owns pharmacy chain Superdrug
and mobile operator Three.
Small investors who sank millions
of pounds into eco-friendly hous-
ing ventures run by TV property
guru Kevin McCloud have been told
they could face losing up to 97% of
their money. For 20 years the star of
Channel 4’s Grand Designs has lec-
tured the nation about how they can
create their dream home – but his
own property empire has turned
into a nightmare.Eddie Stobart Logistics announced
that chief executive Alex Laffey
would step down immediately as
the company applied to suspend its
shares after it missed the deadline
for publishing its half-year results.
Among Stobart’s largest share-
holders is Woodford Investment
Management, run by beleagured
investment manager Neil Woodford ,
which owns 23% of the fi rm.Hasbro, the US toymaker behind
My Little Pony and Play-Doh , has
snapped up the owner of Peppa
Pig, Entertainment One, in a £3.3bn
takeover. The deal, which sent
Entertainment One’s share price
soaring by 30% in early trading last
Friday, is the latest UK-listed com-
pany to be targeted by a foreign
buyer since the weakening of the
pound over fears of a no-deal Brexit.Greene King sold to
Hong Kong tycoon
Massive losses for
McCloud’s backers
Stobart chief to quit
after results fi asco
US fi rm in £3.3bn
Peppa Pig takeover
-49%
The difference, after rounding,
between retailers reporting
annual sales falling (58%) and
rising (10%), according to the CBI.1.6%
Confusingly, July sales growth at
department stores, according to
ONS fi gures the week before last.Beside the pier at
Bournemouth:
more time off
could boost
our economic
prospects, say
experts.
Photograph
by Andrew
Matthews/PA