Labour is paving the way for the introduction of a four-day week in the public sector, days after imposing a £25 billion tax rise on businesses.
Angela Rayner, the Local Government Secretary, on Friday scrapped Whitehall opposition to the introduction of shorter working hours for the same pay by South Cambridgeshire council.
Trade unions applauded as she accused Conservative ministers of “micromanaging” local authorities over the policy.
It came as it emerged that Sadiq Khan, the Mayor of London, has offered Tube drivers a four-day week for the same pay in response to their latest strike threat.
A letter from Nick Dent, the TfL director, to the Aslef trade union on Tuesday pledged to “set out a proposal for delivering an average four-day working week” by January on the condition that members accept a 3.8 per cent pay rise and call off “all pending industrial action”. Aslef’s strikes, planned for Nov 7 and Nov 12, were suspended that day.
Tube drivers, who earn nearly £70,000 a year, currently work a five-day, 35-hour week. Aslef called the proposal a “genuinely groundbreaking agreement” and claimed it would lead to drivers working fewer hours. The union said: “In every four-week pay period, you will be working 10 hours and four days fewer. This also means an increase in the hourly rate of pay.”
Tube workers had already been handed a five per cent pay rise by Mr Khan earlier this year, costing the taxpayer £30 million and prompting accusations that he had found a “magic money tree”.
Last week, Rachel Reeves angered business leaders by not only imposing a £25 billion increase in employers’ National Insurance (NI) contributions but also shielding the public sector from the raise. The move ensured the further expansion of the state relative to the private sector.
At the Budget, the Chancellor said that most state workers would receive an above-inflation pay rise of 5 per cent to 6 per cent next year and also announced extra funding for public sector employers to mitigate the NI increase, meaning the private sector faces an extra burden as a result.
Lord Rose, the Asda chairman, on Friday became the latest senior figure to protest against Ms Reeves’s “very, very damaging” tax rises, warning the supermarket would now be forced to look closely at how many workers it could afford to employ.
Ms Rayner’s decision to allow councils to let their staff work a four-day week was revealed in a Department for Housing, Communities and Local Government (DHCLG) letter to Lib Dem-led South Cambridgeshire district council.
The letter said that a “best value notice” imposed by the previous government was not being renewed. The notice required the council to send data to the Government about the move’s impact on taxpayers, with ministers having formally asked it to end a four-day week “trial”.
‘An end to micromanaging councils’
However, the letter now tells the council: “Although it is not government policy to support a general move to a four-day working week for five days’ worth of pay, we recognise that local authorities are independent employers who are rightly responsible for the management and organisation of their own workforces.
“In turn, local voters are best placed to make decisions about the effectiveness of local authority services in their own areas.”
It says that Deputy Prime Minister Ms Rayner is “committed to working as partners” and adds: “This means an end to micromanaging local authorities.”
It represents a complete about-turn from last year, when Lee Rowley, the then-housing minister, ordered councils to ditch four-day weeks or face financial penalties.
Labour insisted that a four-day week for five days’ pay was not government policy but unions have celebrated the news.
Fran Heathcote, the general secretary of the PCS union, which represents civil servants and government employees, said: “We’re pleased yet another employer has seen the benefits of a four-day working week, and hope the UK Government will follow the more enlightened attitude of the Scottish Government in trialling the scheme.”
The union has already been lobbying government departments to introduce four-day-week practices.
Ms Rayner, a central figure in Labour’s workers’ rights reforms, has previously expressed strong support for the four-day working week.
She told business leaders at an event in May 2023: “In terms of the four-day working week, it goes back to the first question about flexible working. If you can deliver within a four-day working week, then why not?”
The Deputy Prime Minister said that although she did not believe “you can prescribe everything to every person”, she thought “most employers know that if you can deliver a better work-life balance for people, you’re going to retain your staff and have better productivity.”
Kevin Hollinrake, the shadow business secretary, said: “Yet again Labour have surrendered to their union paymasters, and it is the taxpayer footing the bill.
“All it will mean is that we pay more for less. Other unions will be licking their lips at the prospect of this weak Labour Government.”
South Cambridgeshire district council launched a trial of the four-day week last year, allowing staff to cut their hours on full pay.
Its own analysis found that some services got worse in the trial’s first three months, with average call centre times rising by 14.5 per cent and just four of 12 key performance indicators on target. Spending on agency staff at two of the council’s departments increased by £180,000.
A six-month trial of the four-day week across 61 British businesses in 2022 found that revenues increased just 1.4 per cent.
It’s all nonsense, says Farage
Nigel Farage attacked plans for similar schemes during a speech at a Reform conference in Wales on Friday. He said: “They talk about four-day weeks, work from home, life-work balance. ‘Oh, we’re so much more productive at home, darling.’ It’s all nonsense.”
“They have no understanding of the five and a half million men and women who run their own businesses that act as sole traders. This Budget punishes anybody that does their own thing.”
Sir Jacob Rees-Mogg said of the Aslef deal: “This Government, and its acolytes, seems to miss no opportunity to fill the pockets of its friends with gold. The economy stagnates, taxes rise but Aslef is bought off.”
Labour is increasingly bending to union demands on pay and employment rights. Earlier this year, the Government offered junior doctors a 22 per cent pay rise over two years in an effort to end disruptive NHS strikes. In September, Jonathan Reynolds, the Business Secretary, criticised Amazon for ordering staff back into the office five days a week and ending its pandemic-era work-from-home policy.
A government spokesman said: “We are committed to strengthening workers’ rights, and our landmark Employment Rights Bill will make flexible working the default.
“A four-day work week for five days’ pay is not government policy or something we are considering. The steps we are taking in the Employment Rights Bill will strengthen the right to request flexibility in how long, when and where employees work.”
