The director general of the CBI has called on businesses to improve pay levels as the Labour leader Ed Miliband charts what he sees as the “biggest cost-of-living crisis in a generation”.
In his New Year message, Mr Miliband signalled his determination to keep up the pressure on the Government over the squeeze on living standards, despite growing signs the economy is finally beginning to pick up strength.
He sought to counter the increasing optimism of the Conservatives about the state of the economy by accusing them of ignoring the fact that many people were still no better off.
He said: “People are thinking they have made the sacrifices – and the Government keeps telling them that everything is fixed. But it does not seem fixed to them. Surely we can do better than this as a country.
“The Tories want to change the conversation from the cost of living crisis. They will talk about anything else. Inherent in their vision is not a solution to the cost of living crisis, but the problem.”
He said the party would use the coming year to show how it would make “big changes” to the economy to enable the country to “earn and grow our way to a higher standard of living for people.
“People do not want the earth. They would much prefer some very specific promises, specific things about what a government will do – whether it’s freezing energy bills, taking action on pay day lenders, or tackling issues around childcare which lots of working parents face.
“All of this is adding up to a programme for how we can change things. It’s clearly costed, it’s credible and it’s real.”
Families have been facing a squeeze on living standards as levels of pay increases fail to match the speed of rising prices.
As Mr Miliband outlined his attack on the Government, the CBI’s John Cridland said firms face a challenge to make sure economic growth filters through to the workforce as economic recovery takes root.
In his own New Year message he said that businessmen and women have a “spring in their step” compared with a year ago and firms “must support employees in every part of the country to move up the career ladder, while also giving a helping hand to young people taking their first tentative steps into the world of work”.
Mr Cridland said: “As the financial situation of many firms begins to turn a corner, one of the biggest challenges facing businesses is to deliver growth that will mean better pay and more opportunities for all their employees after a prolonged squeeze.”
He said it was positive news that jobs were being created, adding it was shaping up to be a full-time recovery with the majority of new jobs being permanent.
For the first time since the start of the recession, 2014 will see most firms increasing the size of their workforce, boosting their graduate intake and the number of apprentices they take on, he predicted.
“The good news is that wages will pick up in the year ahead as growth beds down and productivity improves.
“But there are still far too many people stuck in minimum wage jobs without routes to progression, and that’s a serious challenge that businesses and the Government must address.”
Mr Cridland spoke of the importance of skills, calling for a Ucas-equivalent vocational system to help raise awareness and parity of esteem for alternative routes to higher skills.
“If 2013 was the year that business trust took a hammering on a range of issues from corporate taxation to energy prices, then 2014 must be the year that business leaders take action to rebuild that trust,” he said.
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CBI: Firms Must Boost Pay After Long Squeeze
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