Return of three day week feared as slump grows
BRITAIN could be heading for the return of the three-day working week as the recession deepens, it emerged last night.
Ministers are considering the drastic action – a relic of the dark days of the Seventies – in a desperate attempt to prevent thousands of job losses.
The radical step was being discussed as fresh evidence showed the downturn worsening.
This week, the International Monetary Fund (IMF) will slash its forecasts for global growth.
Whitehall insiders indicated yesterday that ministers were considering aid to large firms that cut working hours not jobs.
Major firms including JCB and Bentley Motors have already reduced their working week to cut costs and about 40,000 firms are understood to be planning to follow suit this year.
Ministers are believed to want to make emergency loans from Treasury funds dependent on saving jobs and hope to reach deals to reduce working hours.
But the move is likely to stir grim memories of the three-day week under Edward Heath’s Tory Government – although that action was carried out to save electricity in the face of strikes.
Lord Mandelson’s Department for Business and Enterprise advises firms to cut overheads to stay afloat, saying: “You can cut staff cost by restricting overtime or cutting staff hours.”
Treasury insiders say the Government is looking at a wide range of measures after fears that the downturn will be even worse than in the Seventies.
Yesterday, IMF official Axel Bertuch-Samuels confirmed its preparations to slash world growth forecasts.
He said: “It will be revised to one to 1.5 per cent in 2009, which is huge. Global economic prospects have deteriorated in recent months, consumer and business confidence have dropped to levels that we have not seen in decades and activity, too, has dropped sharply.”
Today, Gordon Brown will call for more international co-operation to tackle the crisis.
In a speech in London he was due to say: “Our banking systems have been shown to be totally interdependent and interconnect ed. No financial institution anywhere can insulate itself from the shock that started in the US.
“As banks facing losses retreat to their home markets, we have had a loss of lending capacity in every major market. The fragility of the global financial system must be addressed inter nation ally.
“If what happens to a bank in one country can – within minutes – bring potentially devastating effects on banks in a different continent, then only a truly inter national response – in policy and governance – can be effect ive.
“If we all coordinate our response there will be a quicker global, and therefore British, recovery.”
Mr Brown will claim the recession should be viewed as “the difficult birth-pangs of a new global order” and will warn against an outbreak of protectionism by worried nations blaming global free trade for the crisis.
