The Centre for Economic and Business Research has estimated that Britain’s eight bank holidays cost the economy almost £19 billion a year in “lost” GDP. That’s £2.3 billion each for Good Friday and Easter Monday.
Ignore for now the spurious nature of this calculation.
Ignore the fact that most shops are now open on Good Friday and Easter Monday and that some—garden centres for example—will do more business on bank holidays than on a normal working day.
Ignore the fact that trains and buses still run on Good Friday and Easter Monday and that where lines are closed for engineering work, that work is adding to GDP (and preventing an eventual collapse of the service).
Ignore the fact that many restaurants, pubs and tourist attractions do more business on Good Friday and Easter Monday than on a normal working day.
Ignore the fact that even in the manufacturing industry (which anyway now accounts for less than one-sixth of the total economy) it may be possible to make up for output on lost bank holidays or to use them for essential maintenance work.
Focus instead on what calculations like this, and the stories they generate (like this one in the Daily Mail) tell us about our economic priorities. They suggest maximising GDP remains the overwhelming economic objective. Anything that leads to lower GDP, like a bank holiday, is bad; anything that leads to higher GDP is good.
In a recent paper my colleague, Amna Silim, has argued that this is the wrong approach. It is now time for advanced economies like Britain to downgrade GDP as an economic objective and to focus instead on increasing wellbeing and choice.
The problems with GDP are well known. It only captures activity in the market economy; it includes activities with large external costs (e.g. pollution); and it includes the costs of clearing up these problems (e.g. more crime equals more prison officers equals a higher GDP).
Partly as a result of these problems, the Office for National Statistics (ONS) has begun experimenting with measures of wellbeing. It began with a consultation exercise to discover what people say matters to them. This found that family, friends, health, financial security, equality and…