Pregnancy pains: will EU maternity pay hurt the UK?
Civitas, 14 October 2010
In February, the EU proposed extending the Pregnant Workers’ Directive so that all member states provide 20 weeks of maternity leave with full pay, writes Natalie Hamill. Now, with one week to go before the European Parliament votes on the proposals, the debate has been reignited, with the UK Government criticising the EU for forcing states to increase spending in the midst of tough economic times.
Levels of maternity pay differ hugely across the EU. Current legislation means EU member states must enable 14 weeks of maternity leave and pay (at no less than the level of statutory sick pay). The EU’s proposal to increase this to 20 weeks on full pay is a massive extension. The UK currently offers 52 weeks maternity leave, with 6 weeks paid at 90% of an individual’s salary followed by 33 weeks of statutory maternity pay (SMP), of £124 per week (proposals to change the SMP to cover the remainder of the 52 weeks were shelved indefinitely earlier this year). In comparison, Denmark offers 50 weeks paid maternity leave. Central European countries such as Austria and Slovakia offer some of the most generous maternity leave arrangements in the world, and it is not uncommon to receive 1-3 years maternity leave. Maternity leave provision is arguably something that the UK should aim to do better. But is this the right time economically for the EU to force an increase? Probably not.
The Daily Mail reported that these latest EU plans could see UK contributions for statutory maternity pay treble to £2.5 billion a year, and the Telegraph details that the ‘impact assessment’ carried out by the European Parliament found that, over the next 19 years, the maternity rights extension package will cost Britain £48 billion (the highest cost increase in all the EU member states). It is also somewhat perturbing that the ‘impact assessment’ has only examined the potential impact on 10 member states…
In the UK, business groups have led the intense lobbying campaign against the EU plan to augment maternity provisions. Many feel that, whilst deep cuts are being implemented in all areas of public spending, it is misguided to approve increases in maternity pay. The UK is worried that the EU’s proposed increases will cripple businesses at a time when the economy instead needs a huge amount of support. Lord Young said: ‘We already have a generous system… A substantial increase in maternity leave paid at full or near-full pay risks undermining this delicate balance at a time when economies across the EU can least afford it.’
Others have warned that, contrary to helping women’s standing in the UK workplace, the maternity pay rise could lead to discrimination if would-be employers are put off from hiring women of child-bearing age, because of the potential extra cost.
The EU must be careful not to damage businesses that are already weakened by the global recession. The UK Government’s ‘one-in one-out’ pledge (introduced by Vince Cable to reduce the cost to businesses of unnecessary red-tape by removing regulations when new ones are introduced) may help to remove this burden if such a proposal is approved. However, despite the timing being rather economically awry for such an initiative, the EU Pregnant Workers package certainly raises questions about why the UK is far behind many other EU member states when it comes to maternity support and pay.