Tory Ministers are today urged to pay firms billions of pounds to kick-start a four-day week in the UK.
Left-wing think tank Autonomy says the move would prevent mass layoffs in the wake of coronavirus, by allowing bosses to keep more people on the payroll.
Under the think tank’s ‘Shorter Working Time Subsidy Scheme’, proposed in a new report, firms would cut staff down to 80% hours but still pay 100% of their current wage.
Wages would be funded 80% by firms and 20% by the state in the first year.
That state subsidy would then be reduced by 4% per year over five years until it reaches zero – embedding a four-day week more widely.
If such a scheme was targeted at the arts, entertainment and recreation sector – those hit hardest by Covid-19 – Autonomy claims it would cost £3.8bn in its first year.
That is the same price tag as the Tories’ Stamp Duty cut, much of which will go to people buying second homes or buy-to-let properties.
If retail, food and accommodation were included too, the cost would rocket to £22bn in the first year.
A copy of the report was handed to the government this week by backer and Labour MP Clive Lewis in a meeting with Treasury Minister Kemi Badenoch.
Mr Lewis said it was “a fantastic idea as it would retain jobs and create more desirable working hours in our labour market.
“Post COVID-19, the four day week is gaining in popularity across the world.”
Labour pledged to make the average working week 32 hours long within a decade “with no loss of pay” in its 2019 manifesto.
New Shadow Chancellor Anneliese Dodds has stopped short of renewing that manifesto pledge – but has called for more “short-hours working” to help people transitioning from the government’s furlough scheme.
She has also called for furlough to be targeted to those most in need and extended in local lockdowns.
Autonomy, which describes itself as an “independent progressive think-tank”, said its idea followed on from schemes in Germany and in 1980s Britain.
Run from 1979 to 1984, the Temporary Short-time Working Compensation Scheme helped British firms preserve endangered jobs by claiming part of a worker’s pay from the state.
The think tank’s Research Director Will Stronge said: “Shorter working time has been used throughout history as a way of responding to economic crises.
“It enables work to be shared more equally across the economy. Instead of propping up an already failing economy, the government could act to save jobs and create more desirable working patterns for the future.”