This weekend, John McDonnell and Labour hinted at the possibility of introducing a new element to their next manifesto. Specifically, the Shadow Chancellor said the party was considering bringing in a four day working week. The comments came weeks after Frances O’Grady, general secretary of the Trade Union Congress, called for such a change.
The idea, which Labour could be set to be champion, is another fantasy policy from the socialists who have taken over the Labour policy. McDonnell claims shorter weeks could fix the UK’s productivity problem. He says Germany produces in four days what the UK produces in five. Yet all the proposed change would achieve is cut Britain’s productivity further.
If firms had to pay overtime to workers working what were previously normal hours, production costs would rise for firms. Efficiency and competitiveness would suffer. Productivity would not benefit from this. Rather, Britain would become a less attractive place for private investment.
Labour’s latest proposals must be seen in context. This is not their only wacky measure. The effective state confiscation of 10% of any business bigger than a micro-business. The increasing of corporation tax, despite the clear positive results cuts to it have produced. Extra taxes on large internet firms. Banning flexible working contracts. Let us make no mistake – this is an anti-business agenda. Under Jeremy Corbyn, firms would relocate in far greater numbers than a hard Brexit could ever guarantee.
Corbyn and McDonnell love to push rhetoric relating to giving workers more power. But if such power is delivered by pushing away business, what point does it serve? Businesses are the wealth creators, the risk takers of our economy. The age old fallacy of socialists is to blame them for society’s ills. Yet without them there is no way to solve society’s ills. Now more than ever, the Conservatives must be the party of business. That is how we will deliver better productivity, better wages and better services.
As is always the case, productivity cannot be boosted by simple measures. Structural reforms, better skills in the labour force and improved physical infrastructure and technology are the only effective methods. T-Levels and migration reforms can help to deliver the improved skills base. The government is committed to improving investment in infrastructure, technology and elsewhere after May declared last Wednesday that austerity is coming to an end.
Philip Hammond also declared at conference that as we come out of austerity, money would be split between public investment, tax cuts and public services. This continuation of a balanced approach is the right one. It would be easy to adopt a ‘Corbyn-lite’ policy platform and promise more and more spending. It would also be wrong. Hammond must stick to his approach, loosening the purse strings while still maintaining the first sustained fall in national debt as a proportion of GDP since long before the financial crisis.
These are the policies, combined with smarter regulation and tax cuts, which will improve our productivity. There is no quick fix. Labour may promise the world but they cannot deliver it.