The government should extend free childcare and reduce national insurance for employees in order to raise living standards, the UK’s largest business lobbying group has claimed.
The Confederation of British Industry (CBI) said that increasing support for low income working families by raising the National Insurance threshold and expanding free childcare to one and two year-olds will raise living standards in the UK.
Childcare costs have risen by 27% since 2010, while the average couple with two children saw their earnings fall by £2,132 a year in real terms between 2009/10 and 2012/13, the CBI said.
Speaking at the CBI annual conference this week, John Cridland, director-general said: “The UK needs to face up to some real long-term challenges. Changing skills needs, greater global competition and low social mobility mean for many the pathway to a better life is tough and far from clear.
“We need to invest in productivity, skills and education to make the best of Britain’s talents.”
However, Cridland noted that there are also long-term challenges. He said: “Higher productivity leads to better wages, so we must have a laser-like focus on boosting firms’ competitiveness. We also need to create better ladders to higher-skilled, higher-paid work and improve our education system for all, to overcome disadvantage. Business leaders need to step up to the plate, as well as politicians.”
The CBI also proposes:
- Extending maternity pay from 39 to 52 weeks to close the gap between when maternity leave and free childcare becomes available.
- Businesses adopting a presumption in favour of flexibility from the job advert stage to help employees save on childcare costs.