Reforming maternity pay
Patrick Nolan 5:41pm
While it is widely accepted that the costs of family breakdown are significant, there is less agreement on policy options to support families. Pete Hoskin set out arguments against a simplistic subsidy approach earlier today. Putting together ideas that work is made even harder by the catastrophic state of the government’s books. New policies should provide real value for money and be (at least) revenue neutral.
In our latest report, Reform identified a set of cost-effective reforms to one area of support for new families – maternity and paternity pay and leave – which is currently underperforming. This system of support receives surprisingly little attention, although it currently costs taxpayers around £2 billion every year.
The report finds that Britain has one of the most mother-centric leave policies in the developed world. Fathers are cut out and, as the CSJ reports, fathers’ absence from family life can harm children’s emotional and intellectual development. The rigid structure of maternity leave, with a prohibition on more than a few “keep in touch days,” reinforces a gender pay gap; makes women take an “either-or choice” about work or home; and penalises families at the low end of the income scale. Mothers earning £50,000 and taking six months leave get nearly £8,000 from the taxpayer. Mothers earning the minimum wage of £12,000 per year receive only half as much. Because they cannot afford the time off, low earning women go back to work quicker – so they face a “double crunch” of low pay and short leave. A better approach is to reform maternity pay to make it flatter, fairer and more flexible. It could be paid over the first six months and shared between parents. Both parents could be provided with 6 month entitlements to unpaid leave. These proposals could be implemented without having to spend more taxpayer money.
These changes would provide families with greater space to decide how to balance work and family and spend more time with their kids. While higher earning mothers who take the full leave may see their total payment fall, they will gain from the ability to work flexibly during the first year and to share the payment with the father. Employers would also gain by not having to deal with government paperwork. All they would need to provide is flexible unpaid leave.
These changes would also encourage fathers to give their children greater time. This would not only benefit the family while the child is very young, but would help establish the bonds for a healthy relationship as the child grows older. Rethinking the support provided to families at the start of a child’s life should be central to efforts to address the causes and costs.
Patrick Nolan is chief economist at Reform.



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Rhoda Klapp
July 15th, 2009 6:03pm Report this commentIs there any indication that fathers would take more paternity leave? All new mothers are certifiably insane from late pregnancy to birth plus one year. New babies are nasty selfish unreasonable creatures with no consideration for others. Who would want to be home with them when he could be in a nice office surrounded by colleagues and keeping his career going?
John Moss
July 15th, 2009 6:25pm Report this commentOne reason for family breakdown is the appalling homes which were built in the 50s and 60s and in to which many families were trapped.
The high rise, balcony access flats and maisonettes were just not compatible with family life and while ever we continue to believe a three bedroom flat on an upper floor is suitable for a family, we will fail.
Families need houses with gardens. We have to build more settlements to accommodate this, but also address the very poor quality of much of the existing social stock if we ever want to help the most vulnerable to have a decent home and a decent life.
TomTom
July 15th, 2009 7:05pm Report this commentAnother scam on the taxpayer - flat-rate payments for earnings-related taxes.
They used to clip coins but modern political fraud involves making the middle class pay twice for everything
Andy Leeds
July 15th, 2009 7:09pm Report this commentAny employer who employs a woman of child bearing age is mad. In my experience not only are children 'nasty selfish unreasonable creatures with no consideration for others', but they usually pale into insignificance beside their Mothers. Once they have a child any consideration for other people is the first thing to go, presupposing that they ever had any in the first place.
Rmh
July 15th, 2009 7:27pm Report this commentThe paperwork is so small it is not worth even flagging as an issue.
The core issue is one of pay and how much.
The second core issue is time off and how much and for who.
I think fixing the childcare voucher system errors would be good and zero cost to the tax payer.
However if you could raise that level it would be excellent. And keep it index linked too. Not risen since it was brought in.
In fact it is a good policy by new labour. Just needs a tweak.
I speak as a hr person and parent.
Stephen
July 15th, 2009 9:44pm Report this comment@ Andy Leeds.
Spot on: I'm glad I have retired and don't employ people any more. Why should an employer subsidise child-rearing? (Why should the long-suffering taxpayer, come to that?)
sarah
July 16th, 2009 7:48am Report this comment@Rhoda - if new mothers are so bonkers maybe it's got something to do with what you go on to say about how any sensible father would rather get out of the house if it's got a screaming baby in it!
Splitting parental pay between parents would get rid of the (perceived) problem Andy Leeds identifies. And, Andy, I find your comments about mothers quite astonishingly rude.
Focusing on mothers is increasingly out of date - my husband has a small business and the only person who requested flexible working around children - and eventually left to look after the children full time - was a dad.
Rhoda Klapp
July 16th, 2009 8:42am Report this commentNew mother are bonkers. It's probably ordained by nature for good reasons. But there's no living with them. (They are still bonkers at weekends when hubby is home)
It is also nature which dictates that when you have a mother at work, and a child sick or hurt in home, whether cared for by nanny or hubby, she can't put work first. Mostly men can put their problems on the back boiler. I speak in generalizations, of course, but I've seen it. Those mothers who can concentrate on work at the expense of their kids are the ones who have the ambition to succeed, to break the so-called glass ceiling. This does not make them nice people or good mothers. Indeed, ambitious men are usually flawed too, if they put work before family, but men are forgiven for it. They are classed as a success. But maybe not by their kids.
Oh, and somebody should stand up for the view that says none of this is the state's business to encourage or penalize.
Andy Leeds
July 16th, 2009 8:54am Report this commentsarah, you should be on the receiving end of the inconsideration for others which mothers all too often seem to exhibit then you might actually understand. Example, I was sat in a cafe last week and had the handles of a pushchair shoved up my nose - coffee split everywhere etc - and not a word of apology from the Mother until I said something. Same cafe a few weeks earlier two mothers were sat having coffee and allowed their children to run riot, messing with two very heavy doors. Again they were unconcerned at the disruption their children were causing to other customers and actually to the potential harm their children could have come too had they stuck a hand in said closing door. This sort of behaviour is all too common.
Ruairidh
July 16th, 2009 9:15am Report this commentSplitting current leave and pay entitlements between parents seems like a sensible cost free step.
Adding more entitlement to unpaid leave however strikes me as a fairly hollow gesture. I'm a father with another on the way and despite earning an above average wage I cannot afford to take time off unpaid. Loosing my wife's salary from the household budget is something we can bear, voluntarily loosing mine at the same time would be financial suicide. I imagine most families where both parents work and there is a mortgage will be in the same boat. If you want fathers to take additional time off it needs to be paid and I'm afraid that means paying higher earners more than just statuatory (which won't cover the mortgage & bills).
Arthur
July 16th, 2009 10:20am Report this commentFor a chief economist it is alarming that the author does not seem to be aware that the UK is on the verge of bankruptcy.
It is little social projects like this that when added to all the other little projects puts an enormous burden on the country.
Tax payers should not be supporting maternity pay and the law should but out, too.
It seems incredible that we have created a culture that thinks it OK to pay people for doing nothing.
Until we wake up to the idiocy of this sort of socialism we will continue to sink as a nation.
Kate
July 16th, 2009 11:36am Report this commentGod people are horrendous. Although I'm now feeling quite chuffed that I've managed to keep myself in gainful employment for the past few years despite packing a uterus with intent. Who knew my fertility was that terrifying to a bunch of mean spirited small businessmen?
McSweeney
July 16th, 2009 12:12pm Report this commentWell I see this one has brought a full selection of charlies out of the undergrowth...
Why should the taxpayer subsidise child rearing? Because the children are going to be the ones paying with their taxes for all your retirements and your trip to NHS with the dodgy prostate. That would be the most sensible reason for making it easier for people to have them.
Sharign mat/paternity leave is an excellent idea and would make it more difficult for employers to discrminate against women of child bearing age - after all, maybe it will be that 26 year old man you just hired who wants 4 months off...
Rhoda Klapp
July 16th, 2009 2:09pm Report this commentMcSweeney, indeed there is no fairness problem or piece of social engineering which cannot be solved by government taking my money to give to others more deserving. And they are so wise in the way they spend it.
sarah
July 16th, 2009 3:36pm Report this comment@rhoda - I was certainly rather tired when I had young babies - I wouldn't go farther than that - maybe the fact I split the childcare equally with my husband after quite a short spell of maternity leave helped me stay relatively sane ...
I'm personally rather more stressed by children's illnesses than my husband - but nothing in my experience (of colleagues more generally) makes me think women are more distracted than men by this issue. Surely both women and men should aim for a rational balance between fretfulness and ruthless ambition - but so often a narrower spectrum of behaviour is permitted to women somehow.
Parental leave (within reason) is I assume counterbalanced by parents' tax in the longer run. If I hadn't had maternity leave my husband (not earning at that time) would have had to give up developing a small business (which has since paid lots of tax and employed several people) to look after the children.
@Andy - women (I guess) are proportionately quite a bit more likely than men to be in charge of pushchairs - but I don't think that means mothers are especially delinquent. And it is very tiring looking after children.
Andy Leeds
July 16th, 2009 4:35pm Report this commentSarah, you miss the point. The women I mentioned didn't give a damn for other customers and it was all about 'me, me, me and my children'. They were inconsiderate and bloody rude. I could quote loads more examples but that was just two in a 2 week period. The same attitude permeates the work place where those who do not have children, or whose children are grown up are treated as 'second class employees'. You were lucky enough to have maternity leave, but who do you think covered your absence ? Or when you demand to have your leave in July and August because of school holidays who is it who is busy manning the phones etc ? There is an attitude by those with children that they take precedence. They shouldn't and it is time the balance was brought more into line. Frankly with the burgeoning plethora of 'rights' for those with children I would not advise anyone to employ a woman of child bearing age. Its not worth the agro.
sarah
July 16th, 2009 5:49pm Report this commentAndy - you must have an awfully low tolerance threshold or something! I just don't register this evil mummy syndrome at all! I work in HE so the July/August thing isn't much of an issue - actually though I always envy people who can take their holidays in June or September - cheaper and maybe nicer. We've paid a nanny two lots of maternity leave and you do get it back in the end. In the real world I just don't think there is this friction between those with smallish children and those with no, or much older, children. Most people are tolerant of other people's needs whether they relate to children, sickness or whatever.
The big reason people work flexibly or off site or whatever in my work is having a long commute - but how they organise their work doesn't impact on anyone so that's fine by me.
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