Business leaders call for more free childcare to help families

Business leaders are calling on government to provide more free childcare to help raise family incomes and get more adults into work.

The Confederation of British Industry (CBI), which represents more than 190,000 businesses, is expected to make the recommendation at its annual conference, which begins in London later today.

Free childcare is currently available for three and four-year-olds. The CBI is calling for this to be extended to cover one and two-year-olds.

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According to the CBI, the average couple with two children earned £2,132 less in real-term income in 2012/13 than they did in 2009/10.

"Many parents want to come back to work or put in more hours, but can't because of soaring childcare costs," said CBI deputy director general Katja Hall. "It's ludicrous that the average working couple in the UK now spends over a third of their joint income on childcare."

She told BBC Radio 5 live that the proposal would cost £0.3bn.

It is one of a number of measures to help low-paid households that are still struggling in the wake of the recession.

John Cridland, the CBI director general, said low-income families need "immediate help" with their finances hit "hard" by the financial crisis and slow recovery.

"To ease the pressure on families and people on low incomes, we want immediate action, including cutting employee National Insurance and making childcare more affordable," he said.

Dual-income households could take home an extra £363 a year if the threshold at which people begin paying National Insurance was raised to £10,500 by 2020-21, said the CBI.

A government spokesman said the coalition appreciated that "the effects of the great recession are still being felt", but said it "must keep working through the plan that is building a resilient economy".

The UK's relationship with the European Union is also expected to be a major theme of the conference, with Ed Miliband and Nick Clegg expected to make speeches pushing the economic case for remaining in the EU.