Summary
We agree with the Government that the statutory parental leave system does not support working families effectively. It is right to conduct a full review. The review should fully grasp the scale of the task and address fundamental flaws in the system. It must address priority areas during this Parliament and be the foundation for longer-term reform. Tinkering around the edges of a broken system will let down working parents. The direct fiscal costs of necessary reforms will be substantial but far outweighed by the wider societal and economic benefits.
Low rates of statutory pay are perhaps the most damaging problem across the board. At considerably less than half of the National Living Wage, rates are completely out of kilter with the cost of living, causing financial hardship in many households. Low pay particularly inhibits take up of the very limited amount of statutory leave available to fathers and other parents, many of whom are entirely reliant on the statutory minimum. Increasing statutory paternity pay must therefore be a priority. The Government must consider raising the rate to the same level as maternity pay in the first six weeks, i.e. 90% of average earnings, during this Parliament. Its review must also consider a feasible approach to phased introduction of increases to statutory pay across the system in the longer term.
The Government’s review must have gender equality at its heart. Fathers and other parents are particularly poorly served by the system. This harms not only parents but also children and family life. It entrenches outdated gender stereotypes about caring and wider sharing of parental and domestic responsibilities. It contributes to the motherhood penalty in the labour market and our comparatively large gender pay gap.
The UK’s parental leave system has fallen far behind most comparable countries, and we now have one of the worst statutory leave offers for fathers and other parents in the developed world. Two weeks of paternity leave is out of step with how most couples want to share their responsibilities and balance them with working life. Addressing the stark gendered disparity in our statutory leave periods should be considered fundamental to fixing a broken system and a key priority for the review. It must consider an incremental approach to extending the period of statutory paternity leave to six weeks over the course of this Parliament.
Lack of provision for self-employed fathers and other parents is a key flaw in the system. Their exclusion from the system is deeply unfair. It causes financial hardship and associated family problems. This must be addressed in the review. The Government’s aim should be to include all self-employed and non-employee parents in the system. It should consider implementing a Paternity Allowance equivalent of Maternity Allowance. The needs of other excluded and poorly served groups must also be considered, including kinship carers, single parents and parents of multiple births.
While shared parental leave (SPL) has substantial benefits for those parents who can access it, it is a financial non-starter for most. The eligibility criteria exclude a wide range of working parents, including the self-employed and other non-employee workers, and those on low pay. The criteria are far too complicated for the average parent and employer to understand. The review’s objective for reforms of SPL must be to widen access to as broad a range of working parents as possible, including the self-employed and those on lower incomes. It should consider financial incentives to promote take up, drawing on the experiences of systems in other countries.
Alongside reform of statutory leave and pay entitlements, the review should consider steps to address wider cultural and societal barriers to fathers and other parents taking more leave, particularly in working class households and workplaces. It should also consider the evidence on tackling the marginalisation of fathers in often highly gendered local authority, third sector and NHS services for new parents.