Maternity pay just isn't fair

Published Monday, 16 May 2011
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Ryan Shorthouse: Extending fathers' leave is a positive step, but higher-income women are still benefiting at the expense of poorer mothers

These guys – first David Cameron, then Nick Clegg, now Vince Cable – are proving to be quite enlightened, modern men espousing the benefits of active fathering in the early years.

Despite George Osborne's indiscriminate slash and burn of employment regulations in the budget, the coalition is going much further than the last Labour administration with new plans announced by Cable today to extend the amount of paid leave fathers can have by a month.

Labour's last move was to introduce transferable leave, which came into force this April, whereby fathers could take up any of their partner's unused maternity leave. But only 4% of eligible fathers are expected to take advantage of this.

The coalition is taking lessons, yet again, from Scandinavian countries like Sweden, where fathers have their own extensive leave entitlement on a use it or lose it basis. Unsurprisingly, full-time fatherhood is much more common. Cable's new rule will give fathers in the UK, as well as mothers, an exclusive additional period of paid leave. Rob Williams, the chief executive of the Fatherhood Institute, says it will bring about a "significant culture shift in official assumptions about the role of mothers and fathers".

All good. The old regime reinforced gender stereotypes by granting women nearly a year in paid leave and men only two weeks. This was bad for men – who, in survey after survey, say they want to spend more time with their children – and bad for women – who were pigeonholed into caring responsibilities, harming their employment prospects and exacerbating the gender pay gap.

But these men should be addressing an even more fundamental problem: low-income mothers are only able to take a limited period out of the labour market. This is despite a wealth of evidence showing that maternity leave in the first six months of a child's life reduces maternal depression and improves children's health.

Paid maternity leave is available for 39 weeks. Yet whereas six in 10 women from professional backgrounds stay on maternity leave for more than 26 weeks, only a third of women in elementary occupations and at the bottom of the income scale do. The unaffordability of staying out the labour market for extended periods is cited as a principal problem by these women.

This is because statutory maternity pay after six weeks is paid at a maximum rate of £124.88 a week – a breathtakingly measly amount. Way below minimum wage for a full-time working week.

In a period when the government is reluctant to spend any more money, what it could do is reform the way £1.8bn spent on maternity pay is currently distributed. At the moment, a disproportionate amount of funding goes to those on higher incomes. This is because, for the first six weeks of leave, a mother is entitled to 90% of her salary, whatever the amount, before going to the base rate.

Very senior female politicians, both Conservative and Labour, have blocked any reform to this highly regressive policy. They argue that high-income women have sizeable financial commitments; dropping their salary so drastically during maternity leave would deter them from having children or unfairly financially cripple them.

Yet, these high-income women are more likely to have sizeable savings and be supported by a high-income partner. And two thirds of professional and managerial women receive top-up maternity pay from their employers, above the statutory amount. Despite their lesser need, we continue to waste much precious public money on high-income women.

In these tight financial circumstances, it would be fairer for well-paid women to sacrifice their high maternity pay in the first six weeks, so more money could be distributed to lower-income women. All women could receive a higher statutory rate, ensuring those on more modest means have the choice to spend longer off work.

In fact, because of the new additional periods of leave for fathers, this would also mean more men could access a higher base rate. This could attract more men to take leave, which could help gender equality. Employers could become less sceptical of hiring and promoting women, and be more accepting that caring responsibilities can be compatible with senior positions.

The current maternity leave system is unfair, preventing many mothers from looking after their children in the way they think is best. High-earning women may have to make small sacrifices over their excessively high state maternity pay. But all women could benefit greatly from reform in the long run.

guardian.co.uk © Guardian News and Media 2011
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