Indepenedent:

The prospect of the three-day week returned to haunt Britain yesterday as it emerged that ministers are considering paying firms to cut hours in order to survive the recession.

Tens of thousands of businesses are already planning to scale back working hours this year in an effort to stay afloat. But as the country comes to terms with the reality of a recession, it emerged that the Government is looking at compensating employees, through their firms – thereby drawing comparisons with the shutdowns of the 1970s.

While the move would safeguard jobs, it would mean that the financial crisis is on a much larger scale, further undermining confidence in the economy with the suggestion of Britain grinding to a halt.

Major firms such as JCB have already downed tools for one day a week and are considering moving to a three-day week, with state help, if the recession gets worse. The firm’s chief executive, Matthew Taylor, said that he is pressing Lord Mandelson, the Secretary of State for Business, to introduce compensation for workers if their hours are reduced. Some of the jobs earmarked for redundancy, he said, could be saved if the move is introduced by April.

Ministerial sources insisted last night that a scheme to help compensate workers was "not imminent" but said it was an option being discussed. It would match measures introduced by the German government.

My comment: So the proposal seems to be that if a company cuts back on employees hours so that they are not laid off then the government will make the person whole. Of course the government has no money so it will either have to borrow it, tax it, or print it. Neither of those options will solve the UK economic issues, however it will show that the labor government cares and I am sure Gordon Brown thinks it may help him in the polls. In the end sterling continues to drop and the pain of layoffs and recession to clear out the malinvestment is postponed. Yes government is the solution as always. I hope Obama doesn’t read the UK papers and pick up this stupid idea.

John Polomny
The Real Deal