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CBI calls for tax cuts and childcare subsidies for working families CBI calls for childcare subsidies and tax cuts for working families
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The government must boost living standards for Britain’s working families with £7bn of tax cuts and childcare subsidies, the CBI has urged.The government must boost living standards for Britain’s working families with £7bn of tax cuts and childcare subsidies, the CBI has urged.
The business lobby group said radical ideas were needed to provide immediate relief for families and low-income workers blighted by falling real pay since the financial crisis.The business lobby group said radical ideas were needed to provide immediate relief for families and low-income workers blighted by falling real pay since the financial crisis.
It is calling for changes to national insurance, an extension of free childcare and extended maternity pay as measures that would make an immediate difference.It is calling for changes to national insurance, an extension of free childcare and extended maternity pay as measures that would make an immediate difference.
Publishing a report, A Better Off Britain, to coincide with the CBI’s annual conference in London on Monday, John Cridland, the director general, said: “The financial crisis and the slow recovery have hit people’s finances hard. Living standards will gradually improve as the economy does. But growth on its own will not be the miracle cure.”Publishing a report, A Better Off Britain, to coincide with the CBI’s annual conference in London on Monday, John Cridland, the director general, said: “The financial crisis and the slow recovery have hit people’s finances hard. Living standards will gradually improve as the economy does. But growth on its own will not be the miracle cure.”
The CBI is calling for a gradual increase in the threshold at which employees pay national insurance to £10,500 – bringing it line with the income tax personal allowance – over the next parliament.The CBI is calling for a gradual increase in the threshold at which employees pay national insurance to £10,500 – bringing it line with the income tax personal allowance – over the next parliament.
It calculates that for a family with two earners, it would mean an extra £363 a year in take-home pay. “I think that would make a difference,” Cridland said.It calculates that for a family with two earners, it would mean an extra £363 a year in take-home pay. “I think that would make a difference,” Cridland said.
The CBI calls for an extension of the 15 hours a week of free childcare for three- and four-year-olds to all one- and two-year-olds, saving the average family with a one-year-old £3,430 a year.The CBI calls for an extension of the 15 hours a week of free childcare for three- and four-year-olds to all one- and two-year-olds, saving the average family with a one-year-old £3,430 a year.
It also recommends statutory maternity pay be extended from nine to 12 months, closing the gap between when maternity pay ends and financial assistance for childcare kicks in.It also recommends statutory maternity pay be extended from nine to 12 months, closing the gap between when maternity pay ends and financial assistance for childcare kicks in.
Cridland said that despite the expense to the Treasury – about £7bn over the next parliament – the measures did not amount to the government abandoning its deficit reduction plans.Cridland said that despite the expense to the Treasury – about £7bn over the next parliament – the measures did not amount to the government abandoning its deficit reduction plans.
Instead they would boost growth through additional consumer spending and by widening the talent pool and generating greater tax revenues as more mothers return to work.Instead they would boost growth through additional consumer spending and by widening the talent pool and generating greater tax revenues as more mothers return to work.
Once the economic benefits of the measures are factored in, by the end of the next parliament the net cost to the Treasury would be about £3bn according to the CBI’s estimates.Once the economic benefits of the measures are factored in, by the end of the next parliament the net cost to the Treasury would be about £3bn according to the CBI’s estimates.
“Tackling the deficit is an absolute priority, but I don’t think it’s an either/or debate. We need to be more ambitious about the ways we tackle the deficit. Deficit reduction doesn’t have to be cut and slash.”“Tackling the deficit is an absolute priority, but I don’t think it’s an either/or debate. We need to be more ambitious about the ways we tackle the deficit. Deficit reduction doesn’t have to be cut and slash.”
The average couple with two children saw their real income fall by £2,132 a year between 20091-10 and 2012-13 according to the CBI. Inflation has outpaced wage growth for much of the period since 2008.The average couple with two children saw their real income fall by £2,132 a year between 20091-10 and 2012-13 according to the CBI. Inflation has outpaced wage growth for much of the period since 2008.
Cridland rejected the idea that business were to blame for falling living standards by failing to boost wages for workers.Cridland rejected the idea that business were to blame for falling living standards by failing to boost wages for workers.
“You can’t mandate increases in wages. Wages are at the level that an employer can sustain with the business that they can generate,” he said.“You can’t mandate increases in wages. Wages are at the level that an employer can sustain with the business that they can generate,” he said.
“The National Minimum Wage is about ability to pay. The Living Wage is what people need to earn. Should companies pay the Living Wage if they are able to? Yes. I would encourage them to. Can it ever be more than an encouragement? No.”“The National Minimum Wage is about ability to pay. The Living Wage is what people need to earn. Should companies pay the Living Wage if they are able to? Yes. I would encourage them to. Can it ever be more than an encouragement? No.”