Before offshore wind farms, imported natural gas, and Margaret Thatcher, coal was the king of the U.K. energy system. But in 1973—in an era much like today, defined by high inflation and gasoline shortages—the country faced a winter with little reserves of the stuff to keep it running.
Without the same option we have today of paying exorbitant prices to import more gas, the government at the time took drastic action: It decided to limit work to only three days a week.
Today, pictures of bare supermarket shelves and interminable lines for gasoline across the U.K. hark back to that era—and pose an obvious question: Could a return to the three-day workweek be around the corner?
That ’70s show
While trimming the workweek to improve workers’ quality of life is the holy grail for many progressive nations today, the U.K.’s move almost 50 years ago was anything but a liberal fantasy.
The early 1970s was a time of marked change for the U.K. The Bank of England cut taxes and deregulated the mortgage market while the public was introduced to credit cards, which together led to higher home prices, greater consumer wealth, and the highest rate of inflation the U.K. had ever seen (or has seen since).
At the time, the U.K.’s most powerful union, the National Union of Mineworkers (NUM), declared that caps put on pay raises, meant to control inflation, were depressing real wages, and voted in October 1973 to halve the production of mined coal in protest. The ensuing lack of domestic energy supply combined with an oil price shock that same year—which saw the price of oil go up by 300%—forced the British government to consider any option to conserve limited supplies of electricity. By late December it made its choice: the three-day week.
Starting Jan. 1, 1974, commercial electricity users—in essence, businesses—were limited to three consecutive days of power each week, unless their work was deemed “essential” (think hospitals and supermarkets). Favorite British pastimes were also curbed. Pubs and restaurants were closed on the quiet days, and television channels were barred from broadcasting past 10:30 p.m.
The shortened workweek lasted only for two months, until March 7, 1974, after a general election in February led to a 35% increase in miners’ wages. Despite the short duration, that coal crunch still resonates; looking at the story from today’s vantage point, the combination of high inflation, an energy shortage, and spiking fossil fuel prices sounds all too familiar.
A new three-day week?
The U.K., where gas-storage supplies run the lowest in Europe, has been feeling the pain of the energy transition the most. As offshore wind production slowed down over the summer and the price of natural gas needed to compensate for the shortfall reached new heights almost every day, a string of U.K. energy suppliers went bust and fertilizer producers shuttered their plants to curb their energy bills.
Faced with spiking costs, markets observers like Paul Donovan, chief economist at UBS, expect energy consumers to use less energy, perhaps leading to what he calls a “21st century version of the three-day week.”
“Offices are economically and environmentally inefficient,” Donovan writes, noting the typical office desk was occupied 24 hours per week before the pandemic while the lights were kept on and the office was heated for far longer than necessary.
During lockdown, Europe’s electricity consumption fell by 10%, and while restrictions have been lifted, the local energy market is still out of kilter. U.K. electricity consumption is still 5% to 10% below normal levels. It’s not demand driving this imbalance. Offices are cutting back on electricity.
Now the concern is that sharply higher electricity prices could lead some businesses to shrink opening hours during the winter and ask more employees to work from home to reduce electricity demand, Donovan writes.
The government of Prime Minister Boris Johnson counters there will be no such drastic measures. He says the U.K. is not returning to blackouts. Business Secretary Kwasi Kwarteng, meanwhile, told members of the British Parliament, “There will be no three-day working weeks or a throwback to the 1970s.”
The arrival of winter, not far off, will reveal the cold truth.
