Getting the lowdown on maternity & paternity pay

By Richard Dunstan, Policy & Parliamentary Campaigns Officer, Working Families

Last week I sat in on a meeting held by the shadow minister for women & equalities, Sharon Hodgson MP, with a group of leading employers, to discuss best practice on supporting  new mothers and maximising maternal retention rates.  As Ms Hodgson notes in her report of the meeting “these are employers who know that supporting new parents isn’t just good for families, it’s good for business too; they recognise the importance and value of attracting and retaining talented women in their organisation, and have developed innovative, flexible and genuinely progressive approaches which others can and should learn from.”

However, if  the principal purpose of the meeting was to identify potential ways in which a future government could do more to support new mothers and their employers, the message from the employers present was surprisingly prosaic: increase the level of statutory maternity (and paternity) pay.

As one employer noted forcefully, at £136.78 per week, statutory maternity and paternity pay  equates to just 58 per cent of the adult National Minimum Wage (£236.63 for a 37.5-hour week, at £6.31 per hour).  It also equates to just 48 per cent of the Living Wage (£286.88 for 35-hour week, at £7.65 per hour outside London), and a mere 26 per cent of the median gross weekly earnings of full-time employees (£517 in April 2013).   Getting by on such a low income is challenging at the best of times, but is especially hard when bearing all the additional costs that come with parenthood.  So it’s easy to see that a hike in statutory maternity and paternity pay might well be more beneficial to struggling families than any eye-catching legal reform of the kind politicians tend to look for when writing their election manifestos.

Unfortunately, politicians of all parties are unlikely to have much appetite for any such hike in statutory maternity and paternity pay – at least for the foreseeable future.  All the main parties are signed up to achieving a budget surplus by 2018-19 and, as the Institute for Fiscal Studies reminded us today, as of April this year only 40 per cent of the necessary (and planned) budget cuts will be in place.  The Government has already capped the annual uprating of statutory maternity and paternity pay at one per cent, and a cap on overall social security spending from 2015 could even lead to cuts.

Yet statutory maternity and paternity pay (including maternity allowance) accounts for just 1.6 per cent of the total annual spend on social security, and at £2.75 billion per year is just a fraction of the sum spent subsidising landlords through housing benefit (£24.3 billion). And whilst the level at which it is paid remains so low relative to wages, the prospects for take-up by fathers of statutory shared parental leave – set to replace the existing system of statutory maternity and additional paternity leave from April 2015 – must be bleak.  For £136.78 per week equates to 30 per cent of the median gross weekly earnings of women (£459), but only 25 per cent of the median gross weekly earnings of men (£556).   And if take-up by the minority of fathers who will qualify is low, the cultural shift to shared parenting that all political parties say they want to engender will be glacially slow.

So, are there any politicians out there prepared to forego eye-catching ‘new ideas’ on parental rights at work in favour of pushing real cultural change with a bit of old-fashioned spending?  Time will tell but, if we find any, we’ll be sure to let you know.

In the meantime, please do use the comment button below to tell us what you think!

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