Rishi Sunak and Jeremy Hunt should help young families with the cost of childcare to tackle worker shortages that are holding back the UK economy, the country’s largest business lobby group has urged today.
British households have been spiked by a 60 per cent cash terms rise in childcare bills over the last decade, far outstripping income growth over the same period, forcing people out of the labour market to care for their children.
As a result, Tony Danker, director general of the Confederation of British Industry (CBI), is calling on the government to stop “fighting an uphill battle against early retirement or long-term health problems” and focus on “the parents who would be in work or increasing their hours but for unaffordable childcare”.
At a speech opening the organisation’s Future of Work Conference in London today, Danker will argue the UK needs “a childcare revolution” to lift public funding from its piecemeal level of 0.1 per cent of GDP, the second lowest in the OECD.
His calls echo those made by the economic think tank the Resolution Foundation last week that warned Hunt is unlikely to coax early retirees back into the workforce and should instead focus on budget squeezed parents.
The UK is suffering from an acute outflow of workers from its labour force, with around 900,000 more people economically inactive – out of a job and not looking for one – since the beginning of the pandemic.
A large chunk of people have downed tools and taken early retirement, although most of the inactivity rise has been driven by Brits suffering from long-term physical and mental health problems that have left them unable to hold down a job.
Danker will call on employers today to help staff with health issues and improving wellness, offer flexible working and invest in improving workers’ skills or risk “los[ing] the talent war”.
“The new deal is a truly mutual value exchange of what the employee gives and gets that goes way beyond terms and conditions. The return for bosses from this better proposition is this: loyalty, discretionary effort, leadership. If we want these – not merely employees who clock in − we have to earn them,” he will say today.
A Treasury spokesperson told City A.M.: “[The] spring budget will set out the next stage in our ambitious plans to grow the economy and halve inflation, while getting debt falling.”