Ed Miliband grabbed headlines this morning with an eye-catching proposal to double paternity leave and pay. But is it a ‘tax on business,’ as the British Chambers of Commerce described it, or a well-thought-out plan to increase gender equality in the workplace?
A bit of both actually. The Labour leader’s idea would increase statutory paternity leave from two weeks to four and almost double pay. That would be a burden to business, both in terms of finding extra cover for new fathers and the potential increase in wage packets.
The latter isn’t all that bad though: the £260 proposed is equivalent to a minimum wage, 40 hour working week, compared to the current £138.18 or 90% of average weekly earnings (whichever is lower). Companies can claim most of that back from the taxpayer at the moment and some small businesses don't have to pay it at all.
It wouldn’t necessarily cost the taxpayer either. Analysis in June by left-leaning think tank the IPPR estimated the government would pay out £150m, but Labour said that would be balanced out by reducing tax credits on childcare while also extending free care to three and four year olds.
The other issue for companies, though, is the extra administrative burden the new policy would place on HR departments – especially as shared parental leave is only just about to kick in in April. Not only is that already more work for companies, but it’s also not yet clear what effects it will have.
It would, then, be easy to write Miliband’s proposal off as pre-election grandstanding, particularly as he tries to shrug off the pasting he received from big businesses last week. But while we don’t know what impact shared parental leave, which gives parents the option to share the 52 weeks of maternity leave, will have, it is still biased against dads who want to take time off.
Mothers will still get 90% of their pay, with no maximum, for six weeks of their maternity leave. Most fathers, on the other hand, will lose more of their respective income by taking time off. It’s no surprise, for example, that just 209,000 fathers took paternity leave in 2013/14, compared to 616,000 mothers, according to HMRC data requested by law firm EMW.
Around 40% of working dads won’t even be eligible for shared parental leave anyway, according to the TUC, as their partners don’t work – hence no leave to share. The incentives are still therefore tilted towards mums taking more time off, so shared parental leave only goes part of the way to addressing the gender inequalities that stem from that.
Miliband’s proposal isn’t perfect – it still doesn’t put mums and dads on an equal footing (and would mums get at least £260 a week too?). But it would build on shared parental leave and so take one more step towards levelling the playfield for men and women.