Businesses groan as Clegg announces paternity leave changes

The deputy PM says the UK's 'Edwardian' paternity leave rules urgently needed changing. But is the timing ill-judged?

by Emma Haslett
Last Updated: 06 Nov 2012
Nick Clegg got his chance to make some positive headlines for once today, as he outlined plans for radical changes to maternity leave legislation. The deputy PM plans to stick to an idea originally suggested by Harriet Harman last year: this involves scrapping the current rules, which allow new fathers to take two weeks’ leave, in favour of a new system that will allow them to take up to six months of their partner’s (unused) maternity leave. Equal rights groups are happy - but businesses aren’t, on the grounds that they've got enough to worry about at the moment...

The new rules will come into effect from April, said Clegg (who, with three young sons, has something of a vested interest). But he said that in addition to those changes, the Government will also begin a consultation period looking into ‘a new, properly flexible system of shared parental leave’. The idea is that all mothers would be guaranteed the first six weeks off with 90% pay after they give birth, with fathers keeping the two weeks they have at the moment. But parents could then divide the following 46 weeks up between them ‘in a whole range of ways’ – with parents either taking time off together, or in a ‘number of chunks rather than a single block’, on a ‘use it or lose it’ basis.

In some ways, it’s undoubtedly a good thing. One family group, the Fatherhood Institute, argues that in Scandinavia, where similar rules have been implemented, it has ‘transformed’ family life. And one of the arguments feminists use to explain the gender pay gap is that women frequently miss out on career opportunities because the burden of childcare falls disproportionately on them. So at least this would go some way to resolving that.

But businesses have already let out a collective whimper, pointing out that maternity leave itself already creates a significant financial burden, without the added pressure of men disappearing off for ‘chunks’ of time. And, as with many of these rules, small businesses are the ones that will suffer the most. The Federation of Small Business’ chief spokesman, Andrew Cave, called it a ‘disincentive to take on staff... It shows a complete lack of understanding of how small businesses operate. When you lose someone on maternity leave at the moment, you could lose a quarter of your workforce. This doubles the risk’.

Although Cave went as far as to demand an exemption to the rules for SMEs, we can't help thinking that perhaps a middle ground would be preferable: a way of incentivising businesses to be more flexible parental leave, without imposing extra legal obligations on businesses already struggling to keep their heads above water. But we're not really sure what that would look like.

One thing's for sure though: new business-focused legislation is not really on message for a Government's that's supposed to be ‘focussed relentlessly on supporting growth and driving job creation across our economy’. As Cave puts it: ‘On the one hand the Government is claiming to simplify employment law, while on the other it is throwing up more obstacles to job creation.’

Turns out this 'slashing red tape' stuff is a lot more complicated than it looks. Who'd have thought it?

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