UK baulks at £2bn cost of EU maternity leave proposal

A Brussels plan to extend paid maternity leave to 20 weeks goes down like a lead balloon in the UK...

Last Updated: 31 Aug 2010

A European Union committee has just voted in favour of a big extension to maternity leave – which if passed, would force all member states to offer women at least 20 weeks on full pay. We have a lot of sympathy for the basic principle behind it, i.e. minimising the financial penalty for women who take time out to have children. But since the UK rules are currently much less generous, the Government has been quick to point out that this change would cost us an extra £2bn. And neither the Exchequer nor UK plc really has that kind of cash going spare at the moment...

Under the current EU rules, which were agreed way back in 1992, minimum maternity leave for member states is set at 14 weeks, during which time women must be paid at least as much as the sick pay rate in that country. But now the EU Womens’ Rights Committee is proposing to hike that to 20 weeks – and it believes women should receive their full salary throughout (plus it wants two weeks of fully paid paternity leave for fathers). The draft legislation will now be debated by the full European Parliament next month.

For the UK at least, this would be a huge change. The current deal is that mothers can take up to one year of maternity leave, with the first six weeks on 90% of their salary, then another 33 weeks on Statutory Maternity Pay (£123/ week), and the rest unpaid. So this would basically treble their entitlement – a move that, according to the Government, would cost somewhere in the region of £1.5bn-£2bn. ‘We already have a generous system which is better than many EU countries and works well,’ minister Lord Young complained today. The Government will apparently lobby hard against the changes – but since we’ve given up our veto, there’s no guarantee this will work.

The worry for business groups is that since the Exchequer’s a bit short of readies at the moment, there’s a good chance employers will end up having to foot (at least some of) the bill. ‘The Pregnant Workers Directive should be about setting minimum EU standards for the health and safety of pregnant workers - not adding new payroll costs for overburdened companies and national social security systems,’ the British Chambers of Commerce said today. And it has a point: as many companies struggle to survive, this is a daft time to be adding to the costs of employing staff.

What’s more, we suspect this legislation will (unfortunately) do nothing to advance the cause of gender equality. Businesses – particularly small firms – are already nervous about hiring women of child-bearing age. Trebling the potential cost will only make that problem worse.

In today's bulletin:

EU to investigate whether Google is crushing the competition
Northern Rock savers to lose gold-plated Government guarantee
Editor's blog: Bullying? Listen up, you dozy dolts
UK baulks at £2bn cost of EU maternity leave proposal
Glaxo shows the benefit of business tax breaks

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