Prosperity living

By | Business
At the CBI conference on Monday, in London, David Cameron said, "I agree with what the CBI has said: we should be looking for a reformed European Union. Now I am the politician who has the plan for that reform; who wants to see the single market safeguarded." Image credit - realbusiness.co.uk.

The CBI, the Confederation of British Industry, has called for the implementation of childcare subsidies and tax reductions for working families to help improve their living standards. The business lobby group said that new ideas are needed to raise standards for families and low-income workers. The group is calling for changes to National Insurance and an extension of free childcare and maternity pay in the immediate future.

This report aims to be a business’ blueprint for improving living standards in the UK. It is an agenda concerning individual people and also one that may help businesses do what they do best; create the jobs and growth in the economy that could raise living standards and pay.

The CBI recommends that the government reduce National Insurance Contributions (NICs) for employees. Starting with raising the threshold for employee NICs to £10,500, the level of income tax personal allowance in 2015/16, and then stepping it up further by 2020/21. Furthermore, reducing the gap between free provision of childcare and statutory maternity pay by offering 15 hours of free childcare to all children aged between one and two and extending the right to statutory maternity pay from 39 to 52 weeks. The report also aims to further increase the number of hours of free childcare over time.

For businesses, they recommend changing outdated assumptions concerning flexible working hours in firms and, where possible, adopt a presumption in favour of flexibility from job adverts onwards. This recommendation aims to help employees to manage their work-life balance effectively, including childcare costs.

To improve productivity they suggest that the Office of Budget Responsibility reports regularly and in-depth on the UK’s productivity performance, including sectoral trends and any government-inspired barriers, in the manner of the Australian Productivity Commission. With the support of business leaders, businesses can use this data to guide policy and address the issues raised. Regular and detailed reports from the OBR will also simplify the support network for smaller and medium-sized firms to improve take-up and enhance productivity potential. The report aims to focus on four areas: access to government procurement; the UKTI’s role in supporting exports; simplification of business support, including reducing paying sectors, and access to finance.

John Cridland, Head of the CBI, said at the Better Off Britain conference: “I want to see more low-income paid workers getting the benefit of tax reductions to help with their pay packets. Living standards may gradually improve as the economy does. Even before the recession, the income of a child’s parents determined too many of their own life chances. The UK needs to face up to some real long-term challenges. We need to invest in productivity, skills and education to make the best of Britain’s talents.”

The CBI also advises simplifying the legal, tax and regulatory framework to resolve challenges to the uptake of capital share and employee share ownership schemes among businesses. In addition, helping more people onto the housing ladder and reducing the cost of renting a property by building 240,000 new homes every single year within the next decade.

Responding to a new report by the CBI entitled Better Off Britain, Gill Clipson, Deputy Chief Executive of the Association of Colleges, said: “The CBI is right to call for employees to be more skilled, as this benefits not just the business and the employee, but also the wider UK economy. Colleges are ideally placed and able to provide education and training from entry-level qualifications up to foundation degrees, higher national certificates, diplomas, and higher apprenticeships. They already work closely with employers in their local area, to ensure that students leave college with the necessary skills to join local businesses.”

How might living standards be raised further to assist people?

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