The strain of policies such as the living wage and the apprenticeship levy are threatening jobs and growth, the CBI has warned.
In a New Year message, Carolyn Fairbairn, the business lobby group’s new director-general, hailed the UK’s recovery and record employment rate. However, she has urged the Tories not to sacrifice prosperity for “short-term politics.”
“The government has placed a number of extra strains on UK businesses that are adding up — the national living wage, the apprenticeship levy, pension auto-enrolment,” she said.
“Businesses want to reward their staff fairly, but as the burdens and costs accumulate, particularly in the retail sector, growth risks being cut off and jobs lost.”
A new living wage will be introduced in April, lifting the minimum rate for over-25s by 50p to £7.20 an hour, costing businesses around £1bn a year.
Meanwhile the apprenticeship levy, which is charged at 0.5% of a business’s total wage bill, will start in 2017 and cost them another £3bn a year.