Increased costs of Maternity pay

Initial moves were made in Europe last week to significantly increase the amount paid

in maternity benefits to all new mothers.

On 24 February the Women’s Rights Committee voted to increase the statutory

maternity allowance for all mothers in the EU to include a minimum of 20 weeks of full

pay. The proposals would have the effect of harmonising all member states’ maternity

laws to a level that is currently significantly more generous that that which is currently

offered to new mothers in the UK.

So far, the proposal has met with almost universal dismay from business leaders, who

are concerned that the total cost of this – somewhere between £1.5bn and £2bn –

would have to be met by either the UK taxpayer or businesses. The UK government is

also disappointed by these proposals as it is felt that the economy cannot support such

a generous measure at this fragile time and, in any event, the UK maternity package is

among the most favourable in Europe.

Aside from the cost, the concern is that these measures would discourage businesses

from employing women of childbearing age. If this proves to be the case it would

undermine the intention of the proposals by making it harder for women and new

mothers to thrive in the workplace.

Final ratification of the proposals is still a long way off, however, as the measures still

need to be approved by the full European Parliament and the Council of Ministers,

where the UK has no absolute veto over employment matters. It is estimated that,

assuming the scheme is approved, it would take approximately a year to 18 months to

be made law in the UK.