A Labour government would introduce a 32-hour working week – effectively four days - with no loss of pay for workers, John McDonnell has announced.

The aim would be to introduce the measure within 10 years.

In his keynote speech to the Labour conference in Brighton, the Shadow Chancellor said Britons were working some of the longest hours in Europe and promised that would change.

"We should work to live, not live to work,” he declared.

Mr McDonnell told delegates that in the 1860s people worked a 65-hour week but thanks to past Labour governments or, rather, to the trade union movement, by the 1970s the average working week had been reduced to 43 hours.

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"As society got richer, we could spend fewer hours at work. But in recent decades progress has stalled. People in our country work some of the longest hours in Europe,

"Since the 1980s the link between increasing productivity and expanding free time has been broken. It's time to put that right.

"So, I can tell you today that the next Labour Government will reduce the average full-time working week to 32 hours within the next decade. It will be a shorter working week with no loss of pay."

The move, which was welcomed by trade unions, will involve setting up an independent Working Time Commission to recommend increases in minimum holiday entitlements.

Collective bargaining would enable trade unions and employers to negotiate how to meet the target in each sector of the economy.

Frances O'Grady for the TUC welcomed the commitment and said: "It's time for working people to share in the benefits of new technology.

"That's why unions have been arguing for less time at work, more time with family and friends and decent pay for everyone."

Laura Parker, National Co-ordinator for Momentum, the left-wing campaign group, also welcomed Labour’s announcement, saying: "We are delighted that a shorter working week, a policy Momentum campaigned hard for, has been adopted by John McDonnell and is now Labour policy.

“This is what a democratic party looks like. Policy is being written by the movement with members and the leadership working hand-in-hand to write the next manifesto and deliver the ambitious, radical policies we need to win the next election."

But Edwin Morgan, Interim Director General of the Institute of Directors, noting how the word “business” was conspicuous by its absence in Mr McDonnell’s speech, said: “Labour’s working week policy may be eye-catching but it puts the cart before the horse.

“The only way to reduce hours while maintaining pay is by improving productivity. Companies agree with the Shadow Chancellor that the UK has a productivity problem and want to work with any government to tackle it but blunt regulation on working hours won’t get to the underlying issues.

"Business has ideas and ambition to match Labour’s. It is time for Labour to root its polices in reality, not ideology. Firms have consistently offered to help shape an economy where prosperity is shared more widely. That offer still stands."

Mr Morgan argued businesses were open to ways of improving flexible working for employees and employers but banning zero-hours contracts outright was probably more effective as a line in a conference speech than it was as a mechanism to get people more hours if they wanted them.

“There were some positive statements around supporting regional and green growth and the ageing society but strong ambition will need to be matched by detail. These are areas where private sector innovation will be pivotal and pioneering firms are already breaking new ground but it’s less than apparent how Labour plans to tap into the power of enterprise and stimulate it further,” he added.

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Carolyn Fairbairn, the CBI’s Director-General, said business shared the Shadow Chancellor's aim of a fairer economy but claimed too many of Labour's policies would make this harder to achieve, harming the very people they were trying to help.

"Who would turn down a four-day week on the same pay? But without productivity gains it would push many businesses into loss.

“The inclusive ownership fund grabs headlines but would amount to a tax on workers, pensions and savings. Add these ideas to mass renationalisation, rising business taxes and ongoing Brexit uncertainty and we risk hanging a closed sign on the door of our open economy.”

Ms Fairburn argued that a growing economy built on fairness could only be delivered if business and government worked together.

“Yet here was a speech from the Shadow Chancellor with no mention of the huge contribution business makes, its importance to jobs, investment and prosperity. Only through partnership can a net-zero economy be achieved, wages increased, and new technologies harnessed to the benefit of all,” she added.

Mr McDonnell also pledged that in-work poverty would be eliminated in the first term of a Labour government.

"We have always believed that getting a job should mean you are lifted out of poverty," he said.