APPENDIX 10
Memorandum submitted by Parents at Work
(PL 8)
1. SUMMARY
1.1 Parental leave can potentially benefit
children, families, communities, the wider society and the economy.
If parental leave is unpaid, take up is likely to be low and the
potential positive impact of the leave will be undermined.
1.2 There are three main groups of parents
who will find it difficult to take up unpaid parental leave: the
low paid; lone parent families; primary wage earners.
1.3 A system for paying parental leave should
be based on two principles:
— Recognising the importance of all
parents, including fathers, spending time with their children
and reinforcing the value society places on the welfare of children
— Ensuring take up of parental leave
is not prevented by the financial circumstances of individual
families.
A system of full wage replacement would meet
both principles, but may be too costly to introduce in the short-term.
An alternative could be to make a flat rate payment to all families
taking parental leave, supplemented by a means-tested subsidy
for the low paid to ensure that income during parental leave is
raised to a sufficient level to meet families' costs.
1.4 A system of paid parental leave based
on employers meeting the costs would have a number of disadvantages,
including the possibility of some employers' trying to delay the
take-up of leave and the possibility of an increase in discrimination
against women of child-bearing age in relation to employment opportunities.
A state supported system of pay would avoid these disadvantages.
2. PARENTS AT
WORK
2.1 PARENTS AT WORK is a charity which seeks
to improve the welfare of children of working parents by helping
parents to balance paid work and home. It provides information
to parents on carer leave, childcare and flexible working; works
with employers to promote family friendly policies and campaigns
for changes to legislation and services to promote the welfare
of children and their parents. Our submission on paid parental
leave is drawn from our experience of working with parents and
employers, as well as published research.
3. THE PARENTAL
LEAVE CAMPAIGN
PARENTS AT WORK is a member of the Parental
Leave Campaign and supports the Campaign's submission to the Social
Security Select Committee.
4. THE SIGNIFICANCE
OF PAID
PARENTAL LEAVE
4.1 Statutory parental leave is a very important
measure to help parents reconcile paid work and caring for their
children. Currently the majority of families with dependent children
have both or the only parent in paid work. Many families find
it impossible to provide financially for their children unless
both parents are working. The spread of home ownership down the
income scale is an important factor, as is the withdrawal of rent
subsidies in the public sector. An additional factor for many
parents is the desire to continue working after having children.
With many young women achieving high qualifications within the
education system and attaining interesting jobs this trend is
likely to continue.
4.2 Given these circumstances, parental
leave has an important role to play. If the UK is to compete in
the global economy it is necessary to retain skilled, experienced
and trained staff in the workforce. At the same time it is essential
that families are able to fulfil their parenting functions; failure
has repercussions not only on children but also communities and
the wider society.
4.3 The trend is for mothers to return to
work earlier, the majority of mothers of young children are returning
to work before their children are one year old. With increased
job insecurity and the increasing pace of change in the workplace
many mothers are afraid to step out of the labour force for anything
other than their minimum statutory maternity leave. Parental leave
can in theory provide the opportunity for mothers to extend the
time they spend with their young children, while ensuring job
security and employee retention.
4.4 There are considerable pressures on
all employees to work long hours and fathers work the longest
hours. The result, as research has shown, is that many fathers
spend very little time with their children during the working
week. Parental leave could potentially provide fathers with the
opportunity to spend more time with their young children. As well
as the direct benefits on children of increased interaction between
fathers and children, there could also be a positive impact on
family breakdown and on the rate at which fathers lose contact
with their children after divorce.
5. THE CASE
FOR PAID
PARENTAL LEAVE
5.1 Ensuring Maximum Take up of Parental Leave
Many families will be unable to take up parental
leave if it is unpaid. As a result the positive impact of parental
leave on children, families, communities society and the economy,
which are described above, will not be attained.
Taking up parental leave will be particularly
difficult for parents who are low paid or lone parents and also
for the main breadwinner in a family.
Low paid parents will find it difficult to save
money to replace one wage and the income of one parent is unlikely
to be sufficient to support the families' needs. In the case of
lone parents, taking parental leave will remove the sole wage
and a lone parent is unlikely to be able to save sufficient to
cover this loss. Although many lone parents will be eligible for
Income Support in these circumstances, it is likely that benefit
will be insufficient to cover committed outgoings. Most parents
becoming entitled to Income Support as a result of taking parental
leave will not be entitled to lone parents premium and will lose
out on mortgage subsidy.
5.2 Advancing Equal Opportunities
Unless leave is paid few fathers will be able
to take parental leave. Increasing the opportunity for fathers
to take leave will make it easier for fathers to play a significant
role in caring for their children. Having a father at home looking
after children when the mother returns to work after maternity
leave could make it much easier for mothers to settle back into
work, without having to rush home or worry about childcare.
5.3 Combating Unemployment
Parental leave could be used as an opportunity
for providing work experience for the unemployed, making it much
easier for people to find permanent employment.
5.4 The National Childcare Strategy
While providing for an increase in after-school
and holiday childcare and for nursery schools places for three
and four year olds, the National Childcare Strategy contains little
to tackle the problem of sufficient quality childcare for very
young children. A high uptake of parental leave would relieve
pressure on this sector of the childcare market and would reduce
the likelihood of parents using unsuitable care for their children.
6. TYPE OF
PAYMENT
6.1 A payment to all parents taking parental
leave would show that society values children and recognises the
importance of parents spending time with their children. While
full earnings replacement would ensure maximum take up of parental
leave, this may not be achievable in the short term. An alternative
would be to make a flat rate payment which would have relatively
more impact on low income families in terms of wage replacement.
6.2 Unless a flat payment were set at a relatively
high level, some low income families would find it difficult to
afford to take parental leave. It might therefore be necessary
in addition to provide a top-up, means-tested payment for those
on low incomes. Ideally any payment for parental leave should
be directed to the parent taking up paid leave. There is some
evidence that mothers tend to spend more of their income on children
than fathers. An objective of any system of pay for parental leave
should therefore be to direct payment to mothers where mothers
have taken leave.
6.3 The loss of earnings of the main breadwinner
in a family is likely to leave a family with insufficient earnings
from the other parent to cover fixed costs, such as mortgages.
6.4 Many parents will face a difficult choice
between spending more time with their children through taking
parental leave or ensuring continuity of childcare. Some parents
will already be using childcare, either for their older children
or where they wish to take parental leave some time after they
have returned from maternity leave. In order to retain the childcare
arrangement many parents would have to pay either full childcare
costs or a retainer while taking parental leave. Without paid
leave the cost of retaining childcare will be very difficult to
meet. Yet continuity of childcarer is considered very important
for children's welfare. In addition, losing a childcare place
puts considerable stress on parents who have to find replacement
care when there is a shortage of carers in most areas of the country.
7. MEETING THE
COSTS OF
PAID PARENTAL
LEAVE
7.1 Some employers may choose to pay parental
leave and there could possibly be a system of financial incentives
to encourage this. There are a number of disadvantages to a system
based solely on voluntary payments by employers. If employers
choose to pay parental leave they are likely to target payments
to key workers and the low paid who are in most need of subsidy
are the most likely to lose out. Many employers will be unwilling
to pay for parental leave, because of the direct cost and because
payment will increase indirect costs through increasing take-up.
7.2 A system of compulsory payment by employers
would increase the likelihood that employers would put difficulties
in the way of employees taking up parental leave. The Employment
Relations Bill contains provisions for employers to defer parental
leave; heavy use of these provisions would undermine the parental
leave scheme.
7.3 A generous paid parental leave scheme,
with employers forced to meet the costs, might reduce job opportunities
of women of child-bearing age, thereby distorting the labour market
and having an adverse effect on equal opportunities.
7.4 State payment of parental leave would
avoid the problems of payment by employers. It would be an effective,
relevant means of providing fiscal support to families with dependent
children. Pay for parental leave would help redress the trend
of the last 25 years of the State reducing financial support for
families through the tax and benefits system to the advantage
of those without dependent children.
May 1999
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