Raise statutory holiday to 35 days

Current floor

Most five-day workers currently receive at least 28 days paid annual leave. The policy raises the floor to 35 days.

• The rise is seven paid days.
• That is about 2.7% of working days.
• Many higher-paid workers already exceed the floor.

Core trade-offs

Workers gain paid time off. Employers pay for more non-working time or cover. Output is likely lower unless productivity rises enough to offset fewer hours.

• Workers gain leisure and pay.
• Employers fund cover or downtime.
• Output risk is direct.

Illustrative fiscal impact

+GBP 1.0bn to +GBP 15.0bn. Central estimate: +GBP 5.0bn.

• Positive numbers mean public-finance pressure; negative numbers mean Exchequer savings.
• Gross costs are separated from tax, NI and benefit offsets.
• Private business costs are not automatically fiscal costs.
• Behavioural responses widen the range materially.
• This is not an official costing.

Economic impact by 2027-28

• Jobs: Some cover jobs may rise, but total hours worked likely fall.
• Wages: Raises paid non-work time for workers near the statutory floor.
• Prices: Labour-intensive services likely pass some costs into prices.
• GDP / productivity: Likely negative unless productivity offsets a 2.7% statutory-hours reduction.

Assessment

This is one of the clearest policies where worker welfare can rise while measured output falls. More paid leave is valuable to workers, but the lost working time has to be absorbed through cover, higher productivity, lower output or higher prices.

Confidence: Medium-low. The statutory change is clear; affected counts and productivity offsets are uncertain.

Main risks

• Hours loss: Seven extra paid days reduces available working time for covered workers.
• Cover costs: Hospitals, schools, care and local services may need paid cover.
• Small-firm pressure: Small employers have less ability to smooth absences.

Safeguards

• Phase by firm size.
• Monitor total hours, not only jobs.
• Fund public-service cover explicitly.

Academic evidence

UK government evidence

Sources

• PolicyLens illustrative scenario methodology for raise statutory holiday to 35 days Internal - PolicyLens, 2026
• Holiday entitlement UK government guidance - GOV.UK, 2026
• Whole of Government Accounts 2023-24 UK government accounts - HM Treasury, 2025
• Employment Rights Act 2025 - Economic Analysis UK government report - Department for Business and Trade, 2026
• Rates and thresholds for employers 2026 to 2027 UK government guidance - HMRC, 2026
• Does Employment Protection Reduce Productivity? Academic article - Autor, Kerr and Kugler, Economic Journal, 2007
• Labor Market Institutions and the Distribution of Wages, 1973-1992 Academic article - DiNardo, Fortin and Lemieux, Econometrica, 1996
• Workers' Charter 2026 Party policy source - Green Party of England and Wales, 2026

Other Green policies

• Raise the minimum wage to £15
• Index public-sector pay to inflation
• Add public-pay restoration premiums
• Raise low-paid public-sector wages
• Cap organisation pay ratios at 10:1
• Protect pay in transition schemes
• Create a single worker status
• Equal terms for outsourced workers