House of Commons - Social Security - Appendices to the Minutes of Evidence

Select Committee on Social Security Appendices to the Minutes of Evidence

APPENDIX 8

Memorandum submitted by Parental Leave Campaign (PL 11)

1. The Parental Leave Campaign is an alliance of individuals, voluntary organisations and trade unions. Our alliance is based on a shared belief that parental leave should be:

— Paid

— Operated Flexibly

— Promoted.

SUMMARY

2. Parental leave should be paid because:

— There will be a higher take-up and better parenting

— There will be a higher take-up by men who will be encouraged to assume a more equal share of family responsibilities

— There will be a higher take-up by women and payment will provide for greater equality

— Payment will prevent some degree of child poverty

— There are micro and macro-economic benefits

— Most employers will not pay

— The UK ranks at the bottom in providing leave for family reasons

3. We consider the pros and cons of limiting payment by:

— Flat rate payment

— Earnings linked payment

— Means-testing on family income

— Paying for a period shorter than three months

4. We also consider administration by the employer, the benefits system and by individual parental account/voucher; and briefly discuss methods of finance.

DOMESTIC INCIDENTS LEAVE AND ADOPTION LEAVE

5. In this memorandum, we have not specifically addressed domestic incidents leave. We believe that this leave should also be paid for the same reasons as are set out below for paying parental leave, in many cases the stronger because of the emergency nature of the situation.

However, a different method of payment may be appropriate. We consider that adoption leave should be paid as is parental leave, but that particular attention should be paid to ensuring that adoption leave is flexible.

THE CASE FOR AND AGAINST PARENTAL LEAVE BEING PAID

6. We identify the arguments for payment as follows:

A. Better parenting from a higher take-up of leave

7. Payment for parental leave would provide official recognition that there are times in the working lives of both women and men when being a parent is very important. Over the last two decades there has been a sharp decline in the amount of time parents spend caring for their children: time spent with children has declined by as much as forty per cent in a decade[7]. The pressures of trying to balance work and home life can lead to stress, communication failures and relationship breakdown[8]. Payment encourages better parenting parents can afford to spend more time with their children and their better reconciliation of work and family life means that this time will be less stressful.

8. In a 1997 survey by the NSPCC of 998 children aged 8 to 15, 63 per cent stated that a good parent is someone who spends time with them and this is one of the ways that they show they care[9]. There are long term economic benefits ascribed to better parenting from higher educational achievement to lower crime.

9. Currently the DTI estimates that parental leave will be taken up by 2 per cent of eligible fathers and around 35 per cent of eligible mothers[10]. Payment will encourage higher take-up. This is suggested by:

International comparisons

10. The OECD concluded that the assumption that take-up rates for parental leave were closely correlated with the level of benefits the higher the earnings replacement rate, the higher the take-up rate was confirmed by most of the evidence[11].

11. The Demos book "Time Out"[12] reviews the European experience and concludes that successful schemes contain both a significant level of wage replacement and job protection.

12. Sweden is the country with the highest level of earnings replacement (80 per cent) and the highest level of take-up (virtually all mothers, roughly 50 per cent of fathers)[13]. In Norway, which provides 80-90 per cent earnings replacement, around 80 per cent of fathers take some parental leave[14]. In other EU countries with lower flat rates or lower earnings linked rates, take-up rates are lower, and significantly lower for men[15].

13. Take-up of countries with unpaid leave is largely not monitored and so cannot be compared. However in Greece, where there is no payment, female take-up is estimated to be "very low" and male take-up to be "almost zero"[16].

Survey evidence

14. In addition to there being higher take-up where pay is higher, workers report being unable to take leave where payment is inadequate. In the USA, parents working for some employers may take parental leave of up to 12 weeks under the Family and Medical Leave Act. Some are eligible for wage replacement through insurance, through bringing forward entitlement to paid annual leave, or as an employer benefit. The Commission set up to look into the working of this Act found in a survey of employees that among those who needed but did not take leave, 64 per cent were unable to take leave because they could not afford the associated loss of wages[17]. This finding of the impact of wage replacement on leave-taking was also found in a previous US study of state parental leave laws[18].

15. A TUC survey of working parents found that 50 per cent of women and 40 per cent of men would take some or all of the unpaid leave entitlement, when asked what they would do if they were working and had a child under eight years old. However forty per cent of men and thirty per cent of women felt that they couldn't afford to take time off except in emergency[19].

Take-up of unpaid statutory leave like extended maternity absence

16. A recent study of UK maternity leave[20] found that 14 per cent of women whose only entitlement was to the statutory minimum of 14 weeks' maternity leave take even less than that. The most common reason cited for women returning to work is that they need the money. Seventy per cent of women were entitled to extended maternity absence of up to 29 weeks after the birth of the child, but of these, forty per cent took18 weeks or less. Statutory Maternity Pay runs out after 18 weeks.

17. The Equal Opportunities Commission state that shorter maternity leave is taken for second and subsequent births[21], which underlines the problem of taking unpaid or low paid leave when having to feed a family.

Take-up of unpaid contractual leave given by some employers

18. Figures for take-up of unpaid contractual leave are rare, whether through lack of monitoring or lack of publicity. Bifu, the Banking, Insurance and Finance Union, has published figures from the finance sector[22]. Barclays Bank provides unpaid "parental" leave for male employees, but not for female employees. Take-up was as follows:

— In previous year: 15

— In previous two years: 16

— In previous five years: 42

19. Just seven male employees took an unpaid Lloyds/TSB career break, which could be taken for reasons other than caring for children.

20. Payment is not the only factor affecting take-up. Other factors include access to leave, knowledge of rights on behalf of employees and employers, attitudes of employers and colleagues (particularly for men and for women in highly paid managerial positions), attitudes of partners, and flexibility. While some of these factors require cultural changes, the government must surely have a role in encouraging take-up of parental leave through payment, enabling flexibility and promotion. We believe that payment would be a popular measure.

B. Fathers need payment

21. Encouraging fathers to take parental leave would put the importance of fathering firmly on the government agenda. It would go some way towards changing the culture of long hours amongst working fathers:

22. Through the Working Time Regulations, the government is going some way to alleviating this problem. Many men are not protected by this legislation, for example those taking opt-outs and managers. The 48-hour week is an average, which means that fathers will be subject to peak periods during which their weekly hours may rise above 48 hours. In itself, a 48-hour week is a high maximum.

23. Far too many men will remain insufficiently engaged in parenting. It is not surprising therefore that the 1997 NSPCC survey found that nearly eighty per cent of 8 to 15 year olds wanted to spend more time with their fathers[27].

24. Inadequate fathering has been linked to poor social development of the child, juvenile crime, marital break up, and stress. Male take-up of parental leave would help to provide children, particularly male children, with better role models. Paying fathers to spend a up to three months at home with their young children could be an important part of an overall strategy to encourage men to become more actively involved in the lives of their children.

25. International comparisons suggest that payment is extremely important to influence take-up of fathers[28]. The highest take up of leave by men occurs in Sweden which is "unique for its combination of flexibility and high level of payment to parents taking leave"[29]. In 1990, 86 per cent of fathers took the two weeks' paternity leave available and in 1989 44 per cent took some parental leave.

26. By contrast, in the UK finance sector, the Bank of England allows married couples to share the unpaid element of the mother's maternity leave. In the last five years only one or two male employees have taken this up, but this has only been where the woman earned more than her male partner[30].

27. Thus payment appears to be particularly important for fathers, not just because they need extra encouragement to take leave, but because economics reinforces traditional patterns of household division of labour: if the lower paid female partner takes leave the family loses less financially.

C. Women also need paid parental leave

28. The European Directive places the aims of parental leave in the context of enabling men and women to reconcile their occupational and family obligations:

— It is an equal opportunities measure

— It promotes an easier return to working life and promotes women's participation in the labour force

— It encourages men to assume an equal share of family responsibilities.

29. As well as encouraging men to take on their fair share of domestic responsibilities, paying for parental leave will recompense women when they take parental leave.

30. Just as men work harder when they become fathers, mothers have historically worked less. However mothers are now working longer hours:

31. In 1979-81 only one in fifteen women contributed more to the family budget than their partner but by 1989-91 one in five did so. Women earned on average around a quarter of family income in 1979-81. Nowadays, they earn around one third of family income. Women working full time earn around 40 per cent of family income[35].

32. The increased importance of women's contribution to household income means that pay will be increasingly important in determining whether women can take parental leave, just as their longer hours makes parental leave more important. Most women will simply not be able to afford parental leave without pay. The Government's own estimate is that 65 per cent of eligible women will not take it.

33. Some working mothers with working partners who are either able to save their income or who are genuinely earning income which is only marginal to the family budget may be able to afford to take unpaid parental leave. But the statistics above suggest that this is a small and declining group of women.

Low paid women

34. There will be some working parents, particularly women who face near crisis point, insufficient for them to take domestic incidents leave, but sufficient for them to be unable to work for a short period. They are likely to be low paid and receive no annual leave beyond the new statutory minimum under the Working Time Regulations. The right to return and protection from detriment will give them job security during this time. However the lack of pay means that their earnings will fall.

35. The US Family and Medical Leave Commission shows that it is the lower paid who use Family and Medical Leave more than higher paid (although it is not clear if this is true specifically of parental leave as opposed to other types of leave covered by the Act).

36. If parental leave is unpaid, taking it will add to gender inequality in pay: if women are more likely to take unpaid leave, they are also more likely to lose three months' pay. While full time women's earnings have been catching up with male earnings, this has stalled recently.

37. Women at the lower end of the earnings distribution have seen their earnings rise relatively more slowly than those at the top end[36]. If lower paid women are more likely to take unpaid leave, this will add to their particular problems of inequality. Judging by past experience of occupational maternity schemes[37], lower paid women are less likely to have their pay made up by their employer.

38. Some low paid women, particularly lone parents may be able to claim additional benefit during parental leave in particular circumstances (see below). But many low paid women are not entitled to benefit (because they are means-tested along with the income of their partner).

Lone parents

39. Lone parents have fewer resources, both financial and in terms of time that can be spent with children. Few lone mothers with pre-school children work, although one in three is working or actively seeking work. Those who work are more likely to be working full time than mothers with partners (44 per cent compared to 39 per cent[38]).

40. The ability to take parental leave and to receive payment during this time will be of particular benefit to this group. A study of factors that encourage and discourage lone mothers to find work in 20 countries[39] found that there was no obvious financial reason (earnings, taxes and benefits) for the full time employment rate of lone mothers in the UK being low, but there were offsetting factors. The high level of childcare costs was key, but also cited was poor maternity and parental leave provision.

41. Without a partner to share the burden of parenting, parental leave will be of greater benefit. But without payment, they and their children will suffer.

Black women

42. Black Caribbean women are more likely than white women to be lone parents. Black women are more likely to work full time than white women. Black workers are more likely to be low paid than white workers[40]. Thus the availability of payment for parental leave will be particularly important to Black women, men and children.

Women returners

43. Paid parental leave for both parents will provide new mothers with the flexibility they need to smooth the return to work. There is still a lack of childcare for babies. If women can afford to use their and their partners entitlement to add to a period of paid maternity leave, whether full time or part time, they will find it easier to return to their workplace after having a baby.

44. Paid parental leave may also encourage some women to return to the labour market after a period of economic activity (see the economic benefits, below).

D. Payment will prevent some degree of child poverty

45. The government's emphasis on tackling child poverty could be undermined if parents were forced to choose between spending quality, unpaid time with their children, and spending money earned by working long hours on their food, clothes or toys. Children may suffer disproportionately if women are more likely than men to take unpaid leave, yet their earnings benefit children proportionately more than their male partner's earnings[41].

46. Most children are in poverty because of parental unemployment. It is relatively rare for children with two working parents to be in poverty (depending on the definition of poverty). Payment for parental leave will, however, have an impact particularly for the children of working lone parents.

47. Some low paid women who take leave during the calculation period for working family tax credit may claim increased benefit. But many will be unable, or will not wish, to take their leave to fit in with their benefit calculation period. It is not clear how unpaid parental leave will affect claims for income support or housing benefit.

48. The US Commission on Family and Medical Leave found that those who did not receive wage replacement while on leave coped in the following ways[42]:

— Using savings—84 per cent

— Limiting extras—75 per cent

— Cut leave short—40 per cent

— Put off paying bills—40 per cent

— Borrow money—25 per cent

— Public Assistance—9 per cent

49. Thus, taking unpaid leave could add to problems of poverty, like leaving bills unpaid and going into debt.

E. The economic benefits

50. Another set of arguments in favour of payment flow from the economic case for parental leave.

51. Savings on benefits/increased tax receipts flow from encouraging people back to work as one of a range of measures to help reconcile work and family life. The impact of parental leave on the decision of those who have left the labour market to return to work will be lessened by the one year qualifying period (although it is likely that the law will enable employers to waive this if they choose) and by non-payment. Women's participation in the labour force on an equal footing means that they are more self-sufficient when it comes to pension provision and paying for care in later life.

52. Higher participation and retention rates improve the stock of skills in both individual firms and the labour market as a whole. The stock of skills can be further improved if payment for parental leave encourages more work experience opportunities for unemployed people to cover the jobs of those on parental leave. Extra work experience and extra skills gained will make them more likely to be offered permanent employment in the future.

53. Higher up-take of parental may reduce unregulated absenteeism. Many employers already find that family friendly employment practices improve retention and reduce absenteeism.

54. Men participating in active parenting may learn how to be multi-skilled and more adaptable at work.

55. Improved skills and more happiness at work will improve motivation and productivity and commitment to individual firms. This will impact on the macro-economy.

F. Most employers will not pay

56. There are three parties who could pay for parental leave: the state, the employer and the employee through saving or indebtedness. Despite the economic benefits of family friendly policies, many employers have shown themselves reluctant to introduce them.

57. The 1994 reform of Statutory Maternity Leave did little to stimulate the introduction of extra-statutory schemes or improvements in existing ones. Only one per cent of all establishments reported introducing a scheme as a result. One quarter of the three per cent who already had a scheme made improvements. Most improvements concerned leave rather than pay[43]. Where employers of unskilled and semi-skilled women have introduced family friendly policies, these have tended to be in the form of flexible, but unpaid, leave.

58. Most employers will not pay when their employees take parental leave. Those that do, are likely to direct their payments towards "key" workers: managers in whose training they have invested and whose experience they do not wish to lose. Employers investing in pay additional to statutory maternity pay, or in paid paternity leave, are likely to be larger than average, public sector and trade union organised[44].

59. Firms who cannot afford to pay for parental leave, particularly small firms, may lose skilled staff to larger employers who can afford to attract them with better occupational benefits like paid parental leave.

G. UK ranks at the bottom in providing paid leave for family reasons

60. As the following table shows[45], while the UK currently gives a reasonable amount of time off for maternity leave for those with more than two years' service, we are at the bottom of the league in providing paid leave for new mothers:

Member State Maternity plus parental leave

Total leave Equivalent weeks paid at 100 per cent

UK 40 8.6

Ireland 18 9.8

France 162 13.5

Portugal 118 14

Iceland 26 14.6

Belgium 41 15.7

Greece 46.6 16

Netherlands 42 16

Spain 166 16

Denmark 28 20.8

Italy 47.7 25.1

Finland 43.8 29

Germany 162 31.7

Sweden 65 42

Norway 42 42

Austria 112 47.7

61. The average across Europe is 22 weeks full pay equivalent. If Statutory Maternity Pay were paid at full pay for all 18 weeks, this would still leave a deficit of a month below this average.

ARGUMENTS AGAINST PAYMENT

62. We believe that parental leave should be paid. However, below we set out some of the issues that will need to be taken into account when designing a payment system.

A The cost to the public purse

63. Clearly any government payment will cost. There may be some wasted money as the government subsidises individuals who can otherwise afford to pay for themselves, or whose employers are willing to pay on their behalf. However we believe that the social and economic arguments for some public provision to be overwhelming. Government costs can be limited by:

— Limiting the level at which payment is made, through the use of a flat rate, or cut-off point above which earnings are not replaced

— Limiting the level at which payment is made, through the use of a percentage of individual earnings

— Means-testing the payment to concentrate it on low paid families

— Paying only for a period shorter than the three months of leave or using "waiting time"—a period before which leave is not paid.

— A combination of the above.

B The administrative cost to the employer

64. Any system of payment is likely to imply some administration on the part of the employer. At the very least, the employer must confirm that the recipient is taking parental leave. If the numbers taking parental leave are higher than they would otherwise be, then this will add to the administration. In some methods of payment, the employer would administer the whole system. We accept that this is a "burden".

65. Much has been made recently of employer "burdens". It is worth noting that one 1997 survey of employers showed that over 70 per cent of respondents felt that the regulations on maternity pay and maternity leave were not too burdensome on employers, despite the fact that most thought that the rules were too complicated[46].

66. The issue of administration does not outweigh the arguments in favour of parental payment. It is, however, a factor to be taken into account when designing a payment system.

THE PROS AND CONS OF DIFFERENT METHODS OF PAYMENT

67. Parental Leave Campaign believes that parental leave must be introduced in such a way as to enable future payment. We have no final conclusion a preferred method of payment but offer the following analysis.

68. A discussion of the different methods of payment may be broken down into a discussion of how payment might be limited; how it would be administered; and how it might be financed.

Limiting payments

69. Above we summarised how government costs could be limited. The pros and cons of these ways of limiting the costs are:

A. Limiting the level at which payment is made, through the use of a flat rate, which replaces the earnings of the low paid, more than it does the high paid

70. Arguments for:

(i) It is a benefit based on individual and not family earnings and as such it will tend to enhance equal pay between genders, other things, including differences in take-up rates, being equal.

(ii) It is simple to calculate for both employers and employees.

(iii) Take-up rates in European countries with flat rates are high among women (over ninety per cent) although this includes countries where there is little early years childcare.

71. Arguments against:

(iii) Some very low paid people may earn more on parental leave than they do while working. On the other hand we would not support a lower earnings limit to the payment (where you do not qualify if you earn less than a specified amount) because this discriminates against the low paid, most of whom will be women. The Chancellor has recently taken action to lower the lower earnings limit for the purposes of Statutory Maternity Pay. With the introduction of the National Minimum Wage, the very low paid will be those with short hours and those on youth or trainee minimum rates. It is important that part timers and young parents do not miss out.

(iv) Employers thinking of contributing to parental pay may be put off because it is more difficult to quantify their commitment than it is for a fixed percentage.

B. Limiting the level at which payment is made, through the use of a percentage of individual earnings

72. Arguments for:

(i) Again, this is an individual benefit which will enhance equal pay between genders.

(ii) Replacement rates vary across Europe, from high levels in Sweden (80 per cent) to low levels like Italy's thirty per cent. A high percentage will ensure the greatest replacement of income and will lead to the highest take-up: it is likely that almost all mothers who qualify would take leave as do over 90 per cent of Swedish and Finnish women.

(iii) It is only at a high replacement level (in Sweden) that international evidence shows that men start to take parental leave.

(iv) A high replacement rate will be of maximum help to children.

73. Arguments against:

(i) A low percentage means that all will lose a percentage of pay when taking parental leave, so take-up may be very low.

(ii) A high percentage with no cut-off point, will mean that very high earners will receive the most money. It might be thought that they earn enough to pay for their own leave.

(iii) There are complexities to calculating earnings-linked payments, particularly where hours and pay varies. However employers already have to make two different calculations of average pay—one for annual leave under the Working Time Regulations and one for Statutory Maternity Pay.

C. Means-testing the payment to concentrate it on low paid families

74. Arguments for:

(i) The payment is concentrated on families most likely to be in poverty and will be of greatest help to children in poverty and will provide particular help to lone parents. These are the groups most in need of payment for parental leave.

(ii) Where low paid workers are encouraged to take leave, this may create work experience opportunities for the unemployed to cover their jobs. Low paid work is more suitable for this, as it is likely to be low skilled, and therefore more suitable for a short-term placement.

(iii) An element of means-testing could be combined with a flat rate or income related element.

75. Arguments against:

(i) Women with working partners will only receive a means-tested payment if family income is relatively low. Thus inequality between working women and working men may be exacerbated where women are more likely to take the leave but are not able to receive the payment.

(ii) There could be "purse-to-wallet" problems if the payment is paid to the recipient of existing benefits (working families tax credit), which may well be the father, rather than the leave-taker.

(iii) Means-testing a payment adds to the bureaucracy of recording leave and pay as information about family income has to be gathered and analysed. Working Family Tax Credit is calculated on a six-monthly basis for example. This may not be feasible for employees and employers who prefer short periods of leave to be taken. Thus means-testing may conflict with flexibility. Flexibility may be particularly important to encourage male take-up.

(iv) Means-testing is likely to prevent most working couples from receiving payment for parental leave, yet they are the group which contributes the most in taxes. This could cause resentment.

D. Paying only for a period shorter than the three months of leave

76. There are two ways of limiting the period for which payment is made. One is by only paying for the first few weeks or months. The second is by introducing a waiting time, such as for Statutory Sick Pay, so that leave is unpaid for the first few days or week(s), and then paid. Both could be combined with further limits outlined above during the period of payment.

77. Under the former system, there would be a great incentive for all workers to take parental leave, albeit only for the period for which payment lasts. The second would be unpopular, as is waiting time for SSP, and workers may be encouraged to ask for longer periods of leave than they or their employer would otherwise prefer, in order to receive some degree of payment.

METHODS OF ADMINISTRATION

A. Employer administered, eg tax credit or reimbursed pay

78. Arguments for:

(i) Paying workers through the payroll underlines their continued link with the workplace and the fact that they are still employed. A reimbursed pay system underlines this, by stating that this is pay and not a benefit. A tax credit system also states that parental payment is a tax credit rather than a benefit.

(ii) Employers are closer to the action—they see who is taking leave and will be in a good position to reduce fraud

(iii) Employers will already have to be involved in the administration of leave-taking. Payment involves relatively little additional administration.

(iv) Employers already have to administer Statutory Maternity Pay (a combination of income linked and flat rate) and will have to administer Working Families Tax Credit (means tested) so will have experience in this area.

(v) A subsidy could be easily built in to pay employers back for their administration. This could be targeted on small firms.

(vi) Employers may be encouraged to add to a statutory scheme where they are involved in its administration.

79. Arguments against:

(i) Employers may be encouraged to discriminate against parents or women who they perceive to be more likely to take parental leave, because they do not want to administer the payment in addition to not wanting to have to arrange cover during parental leave.

(ii) Employers are already having to take on board a number of new regulations and are not keen to take on additional administration.

(iii) Small firms may find the administration particularly burdensome

(iv) Employers of women may also find the administration more burdensome than employers of men.

(v) Employers may find the procedures for recouping pay difficult. Insufficient publicity of the ability to recoup most of Statutory Maternity Pay has lead to some employers not claiming what is rightfully theirs. This is a financial loss to employers and may further encourage them to discriminate as above.

(vi) Employers may discourage the use of more flexible arrangements because they do not want to calculate payment more than once.

(vii) Employers may be discouraged from adding to a statutory scheme if they see that the government is already helping workers to some extent.

B. Government administered through application to benefits office

80. Arguments for:

(i) Employers are not involved, so there is less likelihood of discrimination against parents/mothers, and the burden does not fall disproportionately on employers of women.

(ii) Some workers prefer to deal with the benefits agency, which is more anonymous.

(iii) The benefits agency may be better able to link in with other schemes to encourage employers to turn their need for cover into work experience opportunities for the unemployed.

81. Arguments against:

(i) There may need to be additional enforcement to prevent fraud

(ii) There is a stigma to claiming benefits which reduce claims. Many working people are unfamiliar with benefits and find the procedures difficult.

(iii) Working parents may find it difficult to contact a benefits agency office, whether in person or by telephone.

(iv) The benefits system may not be able to cope with claims, particularly where employees use the flexibility option.

C. Privately or publicly administered, through individual parental account/voucher/smart card

82. Arguments for:

(i) Vouchers can be used to record leave-taking as well as administer payment. This is important given the flexibility of leave-taking and the need to keep records between employers.

(ii) This type of system could be more flexible in the face of the different ways that parental leave may be taken. It might even be made more flexible to provide a choice about the rate at which a lump sum payment is taken.

83. Arguments against:

(i) Financial institutions have not shown much interest in similar accounts like individual learning accounts. It is assumed that this is because they are busy with other products like the individual savings account, and because the size of each account is not sufficient to pay for its administration. There may need to be government subsidy to tempt them.

(ii) Vouchers have had a bad name because of the problems with the Nursery Voucher. They remain an unfamiliar method of delivering a benefit, and so attention will need to be paid to explanatory publicity.

(iii) If this system is simply used as a vehicle for more tax-efficient savings on behalf of parents, then it implies little help for the individual concerned. It also relies on individuals being able to plan their saving around families and leave-taking, which will be difficult, especially for those most in need of financial help.

METHOD OF FINANCE

84. Finance for a payment system could come from general taxation, from the social security or inland revenue budgets. It could come from the national insurance fund, paid for by increased national insurance. If it came from increased employees' national insurance, then only workers, as opposed to all tax-payers, are paying the extra tax. It could come from employers' national insurance or a combination of employees' and employers' NI. In EU countries, parental leave tends to be paid through payroll taxes, which tend to be higher across the European Union.

85. Another system of government subsidy would be through setting up individual parental accounts, where funds placed by employees or employers would be matched by the government or attract fiscal incentives. However such a system might be overly complex, and involve too much understanding and planning on the part of parents and those who anticipate parenthood for what is only three month's leave per child. If the responsibility fell heavily on the individual to save for future leave, the benefits could bypass the low paid, young parents and lone parents.

June 1999

7 Mattox, W, 1990, The Family Time Famine, Family Policy Vol 3,1. Back

8 Walker J, 1995, The Cost of Communication Breakdown, BT Forum. Back

9 Ghate D and Daniels A, 1997, Talking about generation, NSPCC. Back

10 HC Deb 12 May 1999, 145-146W. Back

11 OECD "Long-term leave for parents in OECD countries", Employment Outlook, 1995. Back

12 "Time Out", Demos, 1997. Back

13 European Commission Network on Childcare, Leave arrangements for Workers with Children, 1994. Back

14 Care in Europe, Joint Report of the Gender and Employment and Gender and Law Groups of Experts, European Commission Directorate for Employment and Social Affairs, 1999. Back

15 European Commission Network on Childcare, op cit. Back

16 Care in Europe, op cit. Back

17 The US Commission on Family and Medical Leave Act 1996. Back