8 October 2015

  |  CBI Updates Team

Update

Warning on rising employment costs

The CBI warns government that the new apprenticeship levy and national living wage will raise the cost of employment, putting prospects for workers at risk 

Warning on rising employment costs

Katja Hall has been active in highlighting the potential risks involved in the new apprenticeship levy and national living wage.

With some previous attempts at introducing a levy having proven unsuccessful, Katja has highlighted that the new apprenticeship levy is likely to be costly for firms whilst failing to tackle skill shortages. Because of this, the CBI is calling for the levy rate to be set at a fair level by a new politically independent Levy Board, modelled on the Low Pay Commission (LPC). The levy must also be simple and give employers real control, with all funds raised ring-fenced for training.

Click here to read our response to the apprenticeship levy

The LPC itself was also a key feature of the CBI’s response to a call for evidence on the national living wage.  Our report clearly sets out the implications of a significantly higher wage floor for business and jobs; risks highlighted in coverage in both City A.M and the Financial Times

Click here to read more about our response to the NLW

To avoid this, the CBI is calling for the LPC to have a key role in recommending the path of future rate rises. The LPC must be willing to recommend a move away from a target of 60% of median earnings by 2020 if the economic evidence dictates it and the government must accept the LPC’s expert advice.

For more information please contact rachel.smith@cbi.org.uk