Published On: Fri, Nov 1st, 2019

Labour’s 4-day week plan would ‘wreck’ UK economy and ‘turn back the clock’, warns expert | Personal Finance | Finance

Campaign Manager for TaxPayers’ Alliance, Duncan Simpson, spoke to about impact of Labour’s manifesto plans on the taxpayer. During the Labour Party’s conference in Brighton, Shadow Chancellor John McDonnell revealed proposals to cut the working week down to four days. Mr Simpson warned of the damage this would do to the UK economy, and how it would be “very difficult” for small businesses in particular.

He told “Think about how a four-day week would operate.

“Effectively what you’re demanding to employers is that the wage bill would be increased by about 25 percent even though the output of the business isn’t actually increasing by 25 percent.

“Wages should broadly match the productivity of your workforce.

“If there’s a demand to say we’re for cutting the workforce by 20 or 25 percent but actually maintaining the same wages.”

READ MORE: Pensioners in danger from Labour’s renationalisation plans

He added: “That’s not conducive to a lot of small businesses, in particular so that’s very difficult.”

Conservative MP Rishi Sunak, the Chief Secretary to the Treasury, also slated the plans: “John McDonnell offers nothing but failed ideas which would wreck our economy, harm businesses and drive out investment.

“Far from delivering for the many, McDonnell’s damaging plans would leave families with less money in their pockets and fewer jobs. Labour would turn back the clock, with working people paying the price.”

Matthew Lesh, Head of Research at the Adam Smith Institute, also slammed the idea, saying: “Labour’s bizarre idea to force people to work less will mean lower wages and fewer opportunities for millions.”

He continued: “They don’t pay VAT, certain reduced rates, obviously they have charity status which is advantageous for that.

“It’s about seven or eight percent of the total number of kids in education who are in private school.

“The cost of transferring all of that over to the state sector will be well in excess of the current tax advantages which quite a few of these private schools enjoy.

“I don’t know what the particular view in the Labour Party is on how they would actually implement that, for example to make sure there would be enough spaces and how this impacts people’s taxes.

“That’s going to be quite a severe consequence in terms of how do we actually pay for hundreds of thousands of more kids moving from the private sector to the state sector.”

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