What would four new bank holidays would mean for Hertfordshire small businesses? Implications of the Labour Party’s 2017 election policy.
In the run-up to the 2017 General Election, the Labour party has announced a manifesto promise to create four new bank holidays – one for each home nation in the UK. Four additional public holidays would have important implications for Hertfordshire small businesses. In virtually any change there are pros and cons, and winners and losers.
Pros for Hertfordshire Small Businesses
In some cases, public holidays can lead to increased sales. As the general public have more time to shop on the internet, or buy goods from local retailers, there is an argument to say that turnover would increase for some Hertfordshire small businesses if the policy came into effect.
Jeremy Corbyn says, “…our workers deserve a break… they will have the opportunity for four more days off per year.” Time away from work is important and necessary. More rest for workers could help to ensure that when workers do return to work that they are more refreshed, focused and productive.
Cons for Hertfordshire Small Businesses
With staff on permanent salaries, four new bank holidays could mean incurring the same employee costs, but receiving four fewer days work per year. The majority of Hertfordshire small businesses don’t have vast cash reserves or fat margins. Those that employ people are often highly sensitive to small changes in costs and income. Four extra paid bank holidays will be a bitter pill to swallow.
Where Hertfordshire small businesses do continue to trade through the new bank holidays, the question of premium pay rates will be raised. Business owners may find themselves having to pay a premium for their staff to work on days that used to cost a standard rate. Given tight margins, we can expect this cost to passed onto the customer, with increased bank holiday pricing.
At first glance, permanent members of staff are the most obvious winners from this policy. Having more time off for the same pay will likely be welcomed. Hertfordshire small businesses that can benefit from increased sales, e.g. retail, ecommerce, hotels, etc – may welcome the additional bank holidays, especially where orders can be taken on the bank holiday, and then fulfilled using regular staff costs a (few) days later. However, businesses that match this profile make up a fraction of all businesses operating in Hertfordshire.
The majority of Hertfordshire small businesses are likely to face higher staff costs – either through reduced productivity, or premium pay rates if they continue to trade over the bank holidays. For businesses that are just about breaking even, this change could put them into loss-making territory. Sustained losses eventually lead to job cuts, which will eventually affect the flexible and permanent workers that the policy is designed to benefit.
With staff on more flexible contracts, including zero hours, there simply will be less work to do and therefore offered. More flexible workers in Hertfordshire small businesses will likely lose four days of pay if the business does not trade over the bank holidays.
Hertfordshire small businesses that don’t benefit from an increase in sales over bank holidays are likely to face higher levels of disruption – delays to deals being closed, rescheduling meetings, etc.
Conclusion for Hertfordshire Small Businesses
It’s difficult to see how four new bank holidays could be a net-beneficial change for Hertfordshire small businesses. The businesses themselves are likely to face higher staff costs. Flexible workers, in the majority of cases, will lose income. Whilst permanent employees will likely benefit in the near-term, a small number will potentially lose their jobs in the long-term.