§ Mr. Stephen O'BrienTo ask the Secretary of State for Trade and Industry what assessment she has made of the 417W potential cost of prohibiting employees from working longer than an average 48 hours per week to (a) small businesses and (b) the UK economy as a whole. [153916]
§ Mr. SutcliffeEmployers are likely to respond in a variety of ways if legislation were passed to prevent employees from working longer than 48 hours on average. Firstly employers may absorb the curtailment in working hours either through reducing output or realising productivity gains through changed work arrangements. Alternatively, employers may replace in whole or part the lost hours by recruiting more staff or asking existing staff to work longer hours (while remaining below 48 on average).
418WThe extent to which employers do not compensate employees for lost hours and reductions in overtime pay would partly offset employers' costs in replacing lost long hours worked. This makes any precise estimate of the cost of prohibiting employees working longer hours difficult.
However, DTI estimate that if one quarter of the hours worked over 48 per week were replaced by employers at extra cost then the value of those hours would be around £3 billion per annum. If three-quarters of long hours worked were replaced at extra cost then the value of these hours is estimated at around £9 billion per annum.
Estimates for small businesses are not available.