Enjoy the long summer break: it is on its way out

In Britain we take four or five weeks of holiday; in France, six weeks; in the US it is still only two

"I find that a change of nuisances," David Lloyd George said, "is as good as a vacation."

He was responding to a question as to how he managed to remain cheerful in the face of a string of political adversities. It is surely true that a variety of problems is easier to cope with than the relentless pressure of a string of similar ones. But I think the quotation works just as well the other way round: a vacation is a change of nuisances.

Holidays present us with a range of problems, even without the assistance of a British Airways strike. Yet because the problems are different from those of day-to-day life, we relish them. It is, for example, much more interesting to have to figure how to clear a leaking mask when scuba diving in Cuba than it is, say, to work your way through a series of automated telephone responses before you're allowed to talk to a human being.

We go on holiday not because it is less stressful, but because it is differently stressful.

Most people know that the pattern of holidays varies vastly from country to country. It is one of the defining differences between northern and southern Europe. Northern Europeans travel either south or, in the case of Britons, to North America. Southern Europeans (and for the purposes of this exercise, the French are southern) stay in their own country.

But more remarkable is the difference between Europe and the rest of the developed world. Europeans (and for this purpose Britain is in Europe) take huge amounts of holiday. The two other main developed regions, North America and East Asia, take very little.

In Britain, we take four to five weeks a year, in Germany it is five or six and in France six. In the US, it is still only two weeks for most people - the average is only two weeks and one day - while in Japan, the norm that most people take (as opposed to their formal allocation) is between one week and two.

This raises two intriguing questions: why are Europeans different, and will the trend to longer holidays persist - or reverse?

The difference question has a rational explanation. It is tax and the size of the public sector. In the 1950s there was no significant difference between the amount of time North Americans and Europeans had for holiday. Two weeks was the norm, sometimes rising to three for senior grades. Americans actually worked a shorter week than most Europeans, for the five-day week (as opposed to five weekdays plus a half-day on Saturday morning) had arrived in the US before it arrived in Britain around 1960.

But then came rising tax rates and soaring inflation. Companies, faced with huge demands for wage increases, found it easier in the short-term to concede longer holidays. The public sector, where output is hard to measure, could concede these particularly easily as any decline in performance went almost unnoticed. Meanwhile, working people found themselves pushed by inflation into higher tax brackets, and so were happy to take more time off (which was not taxed) instead of more pay (which was).

In North America, by contrast, and in Japan, government was smaller and the tax wedge less sharp. So it was still worth getting more pay rather than more holiday.

If that explains the divergence in holiday patterns, it might also explain the very early signs of convergence. After a generation of growing apart, Europeans and Americans might be growing together, in this respect at least.

There are a string of reasons for this. The most obvious is that the age of inflation is over, so people are no longer pushed into higher tax brackets by inflation. Second, most European countries - Britain is an odd exception - are cutting tax rates on earned income, so it's worth being paid in money again.

Third, there is huge pressure on European companies to improve their performance, which has forced them to look at the benefits they offer their workers. Fourth, this squeeze on companies coincides with a squeeze on living standards in most of continental Europe, with consumption rising by little more than 1 per cent a year in Germany and Italy over the past five years. So some workers, particularly younger ones, may be prepared to have slightly shorter holidays in exchange for higher pay. Contracts to new employees frequently specify shorter holiday entitlement than that enjoyed by older workers.

Fifth, many work contracts, particularly on the Continent, are for fixed periods, creating a different attitude among employees; inevitably they are less secure and more eager to accept whatever terms they can get.

Finally, on the US side there is some evidence of longer holidays being on offer - not a lot so far, but enough to suggest that some longer-term change may be in the air. One big trend among US firms is to try to see that pay is related to results rather than hours worked, and new technology is making it easier to do so. But once you pay by output rather than input, you give the employee freedom to choose whether to put in long hours or not.

Paradoxically, output is often higher when hours are shorter, as France discovered when it cut the duration of the working week. Staff found they had to work harder because they had to get the same amount of work done in a shorter time. (If you are in a restaurant in France this summer, note how hard people work compared to their British equivalents.)

Of course, none of this is conclusive. The latest figures from the States suggest that the recession has encouraged companies to squeeze holidays, and as workers feel their jobs are not secure, many are not even taking off the time that they are entitled to.

Looking ahead, what seems likely to happen is that the US work ethic will remain sufficiently strong to stop America adopting European patterns, but that the need to compete globally will force European companies to try and squeeze all sorts of benefits, including time off. Pressure on governments will eventually force them to do the same. So we will converge, but this will be because we will become more like them, rather then them becoming like us.

If that sounds a slightly dismal proposition, there are bright spots. The cost of travel is shrinking relative to the cost of being in a foreign place. We may not take more holiday time in total but we will travel more and we will take more frequent breaks. We will also use our weekends better. Continental Europeans are already being weaned off the solid break for all of August and are splitting their holiday time into shorter periods spread through the year. Britons are taking more and more short city breaks, also spread through the year, rather than packing most of their holiday time into two chunks.

This must be sensible. An excess of leisure, like an excess of almost anything, is boring. In that push for more time off that every European country experienced in the 1970s and 1980s, we began to experience the limits of leisure. Retirement is the ultimate form of leisure: it is a compulsory holiday entitlement of 365 days a year. Yet now our societies are beginning to resist that, for legislation is proposed that will make it illegal for people to be retired against their wishes. And retirement ages are rising too.

So we need to have problems. Many of us need the problems of work, though perhaps not on the scale that faced Lloyd George. We also need to have the problems of holidays - which is all to the good, for we are sure to get them.