Select Committee on Social Security Appendices to the Minutes of Evidence


Memorandum submitted by Parents at Work (PL 8)


  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.


  2.1  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.


  PARENTS AT WORK is a member of the Parental Leave Campaign and supports the Campaign's submission to the Social Security Select Committee.


  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.


5.1  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.


  6.1  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.


  7.1  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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