Maternity pay system criticised by Reform study

In its report Productive Parents, Reform criticises current parental leave arrangements for treating fathers as an 'irrelevance' and for being more generous towards rich mothers than poor mothers.

It says Britain has one of the most old fashioned parental leave systems in the developed world.

The report says that mothers earning £50,000 and taking six months leave receive nearly £8,000 from the taxpayer, whereas mothers who earn the minimum wage, which works out at around £12,000 per year, receive only £4,500. This disparity arises because the first six weeks of maternity pay are based on 90 per cent of the mother's previous average weekly earnings, with no upper limit. The remaining 33 weeks are paid at either the standard weekly rate of £123.06 or at 90 per cent of the mother's average weekly earnings if this is lower than the standard weekly rate.

Elizabeth Truss, deputy director of Reform, said, 'There is something wrong with a system when mothers on high incomes and gold-plated maternity leave also get most money from the taxpayer.'

Other recommendations made by the report include offering six months of unpaid leave to both the mother and the father during the first year of a child's life, which could be taken at the same time or one after the other, and abolishing what Reform calls 'gimmick' programmes such as the Health in Pregnancy grant and the Healthy Start scheme.

It says that regulation on childcare provision should be reduced and that initiatives that aim to reform education, skills, health and welfare provision should be accelerated to help workless parents keep in touch with employment.
The report says that implementing these recommendations would greatly reduce the burden on employers, who would no longer have to administer maternity pay.

The report is available at www.reform.co.uk.