PROS AND CONS OF A NEW BANK HOLIDAY
THERE has been growing pressure to make St David’s Day a bank holiday in Wales. A petition on the matter, on the UK Government website, has also attracted more than 10,000 signatures.
But the UK Government has so far refused to allowed March 1 to become a bank holiday. Here, we take a deep dive into the issue to try to make some sense of the debate.
Are the days of other British nations’ patron saints a bank holiday?
In 2006, the Scottish Parliament passed the St Andrew’s Day Bank Holiday (Scotland) Act 2007 which designated the day as an official bank holiday. Though it is a bank holiday, banks are not required to close and employers are not required to give their employees the day off as a holiday, though the University of St Andrews traditionally gives the day off for all its students. In England, St George’s Day is not a bank holiday.
Why won’t the UK Government grant Wales a St David’s Day bank holiday?
Back in 2000, the then National Assembly for Wales voted unanimously in favour of a St David’s Day bank holiday but the UK Government still won’t budge. The rationale is that it will cost the economy money and have a negative impact on businesses.
In December 2021 UK Government minister Paul Scully wrote: “While we appreciate that the people of Wales want to celebrate their patron saint, more people work across the English/ Welsh border than across the English/ Scottish Border. This closer degree of integration could cause greater business disruption. If we had separate bank holidays in England and Wales, the impact on both employees and businesses is difficult to predict.”
Will a bank holiday on St David’s Day actually negatively effect the economy?
This is really hard question to quantify. On the one hand, it is obvious that most people not working will hit productivity. But there is the argument that over a bank holiday weekend people spend more money in areas like hospitality. There are also the health benefits of working fewer hours.
“It is very difficult to quantify the financial costs of bank holidays,” said John Bryson, professor of enterprise and economic geography at the University of Birmingham. “One calculation made by the Centre of Economics and Business Research in 2012 suggested that every bank holiday in the UK resulted in costs of £2.3bn, but this analysis highlighted that measuring the impacts was very difficult.
“However, there is an important point to make here in that some economic sectors would suffer from the fall in output from a lost working day, but other sectors would benefit.
“Thus, sectors that would benefit would include leisure, hospitality and retail as well as any economic activity producing products and services that would contribute to this bank holiday.”
He added: “Some accounts suggest that a bank holiday could add value to an economy and that the range would be somewhere between a benefit for the UK economy of a UK holiday of over £1bn, or a loss of £3.6bn. It depends on what costs and benefits are identified and included in the analysis. However, the decision to make St David’s Day a bank holiday should not just be based on economics, as Welsh identity is much more important than a discussion based on monetary value and economic impacts.”
What is the evidence from other countries?
Dr Edward Jones, lecturer in politics at Bangor University said: “Many countries are looking at introducing new bank holidays as a way to boost their economies but the benefits from bank holidays aren’t black and white. Most countries in Europe have 12 annual bank holidays.
“Proposals for new bank holidays have stalled due to a dispute among policymakers and economists; do the benefits of bank holidays outweigh the costs? The evidence is mixed. In 2011, Italy introduced a one-off holiday to mark the country’s 150th anniversary of unification. This holiday was found to have a positive, albeit small, impact on the economy. Analysis done for Australia in 2015 suggests that the introduction of a new bank holiday would have an adverse impact on the economy.
“Central to the question of if bank holidays boost economics is whether the benefit of having increased consumers spending on or around the holiday outweighs the loss of productivity by letting employees off work. This central question pits tourism, recreation and retail industries against other traditional industries. More bank holidays make sense where tourism is a significant part of the economy.”
This suggests that different parts of Wales could benefit more than others. “The local economies of Conwy and Pembrokeshire, where tourism is a major employer, would benefit more from an extra bank holiday than other parts of Wales,” said Dr Jones.
“There are other dividends too. Bank holidays enable people to take a day off work to enjoy their hobbies, take trips, or get together with family and friends. As a result, bank holidays have a positive impact on staff morale and workers are typically more productive the day after a bank holiday because they were rested and relaxed.
Traditional employment industries would benefit from these dividends.”
Dr Jones pointed to other studies which suggested that smaller retail saw higher profits during a bank holiday. A study in 2018 by Yell Business found that bank holidays gave UK small shops an average extra boost of £253 in profit. Other studies have found that bank holidays boost retail sales by 15% (albeit this is biased towards DIY, gardening and furniture sales).
Research by the Centre for Economics and Business Research found that an extra bank holiday in 2020 could add £500m to the British economy through extra spending. While some businesses would welcome this extra boost, others have already lost substantial revenues during the pandemic and are badly placed financially to absorb another day when they have to pay staff for not working.
Why is Wales being treat differently to Scotland?
If we take the rationale of Tory MP Paul Scully, it is a matter of geography. Wales’ border with England is far longer and more integrated than Scotland’s. It is argued that having people on one side of the border work when the others are not would be immensely disruptive to production lines etc.
But what do businesses say? Town Square Spaces is a small business support and coworking company headquartered in Caerphilly that operates coworking spaces across the UK with hubs and staff in London, North Wales, Oxfordshire, West Sussex and Devon.
COO of the company, Mandy Weston said that she actually sees this challenge as an opportunity. She added: “As a proud Wales-based company, we think it’s about time St David’s Day was a bank holiday and it’s an overdue idea.
“As the company has grown we have opened further hubs across the UK and so now a large portion of our staff are based in England, who wouldn’t benefit directly from the extra bank holiday. Also, a lot of our call handling and admin support is based at our Caerphilly headquarters, so we would need to remain open and staffed.
“However, this wouldn’t be as disruptive as it may seem as the way many of us work is already changing. Whether it’s moving to a four-day work week, or working less hours across more days, organising staff into shifts gives them more freedom, and helps businesses stay agile and responsive to changes such as this.”
Professor Bryson agrees, adding: “There are no logistical or business challenges to one part of the UK having a bank holiday that is different to other parts. Scotland, for example, already has bank holidays that are different to the UK. Thus, there is a precedent here. In Scotland there are also special holidays celebrated by different major towns and cities. Why should Wales be treated differently from Scotland?”
Unsurprisingly, hospitality businesses we spoke to were also in favour of a St David’s Day bank holiday. John Bassett, landlord of the Four Elms pub in Cardiff, said: “Bank holidays are great for our trade. If anything it’s extra hours for staff and an extra weekend day on the Sunday night. Added into that you can have a booming Monday lunchtime.”
Ben Cottam, head of Wales’ Federation of Small Businesses, said: “There is a benefit in capitalising on the brand on St David’s Day, not just in tourism but in other areas such as exporting food and drink, for instance.”
Prof Bryson added to this sentiment saying: “Welsh identity is about place, people and culture and this includes language, music and all the traditions and related narratives that lie at the core of Welsh identity. It is important this type of place-based identify is cherished and appreciated and understood by people living in other places.”
Despite some support for St David’s Day becoming a bank holiday, Mr Cottam believes there needs to be more research, adding: “Any day that represents a disruption in trading is a challenge for small business. The economic balance of questions in the debate hasn’t been fully explored. Debates are often led more by emotion but I believe there is a the case of looking further at what it might mean for the economy.”
Ma“ny countries are looking at introducing new bank holidays as a way to boost their economies but the benefits from bank holidays aren’t black and white
DR EDWARD JONES, LECTURER IN POLITICS AT BANGOR UNIVERSITY