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Employment Rights Bill

My Lords, I am grateful to the noble Baroness, Lady Lister, and the noble Lords, Lord Palmer and Lord Hampton, for their support, and all noble Lords who have spoken in this Chamber or outside of it in favour of improving leave for new fathers. I also have Amendments 101 and 102 in this group, the arguments in favour of which have not changed since Committee, but for reasons of time I shall focus on Amendment 100.

Since Committee, the Government have launched their review into parental leave. At the launch, the Business Secretary acknowledged the arguments that I am making today, saying that only about one in three new dads takes paternity leave, mainly for financial reasons, and committed:

“This review is our chance to reset the system and build something that works for modern families and businesses”.

The Government say that they want to fix the system and that part of what is broken is the low level of paternity pay available. It is logical, therefore, that any solution would address this. That is all that my amendment seeks to do.

First, my amendment would ensure that there are no further delays to this work. Given that it was meant to be completed within the Government’s first year, it is reasonable for the amendment to commit the Government to its new timeline of completing the work 18 months from now. However, for a review to be of any value, it must lead to action, so this amendment commits the Government to improving paternity leave once the review is completed, reaching a minimum of six weeks at 90% of pay, with a cap, by the end of this Parliament, in line with the key recommendation of the Labour-chaired Women and Equalities Committee, which has considered this issue carefully and in detail.

Such a commitment does not pre-empt the review. If the purpose of the review is to improve the system that we have, then this is the number one way in which it needs to change. It leaves open the question of how to do this, whether through increasing paternity leave or changing shared parental leave, so that it actually works for families. However, there is no point to a review if it does not lead to change.

The reason I am pressing the Government so hard for action—not just warm words—is that, each year we delay, more than half a million fathers and second parents are welcoming a new baby into their family without the ability to properly bond with their child or support their partner. Working on this amendment,

I have spoken to too many fathers who have been heartbroken at having to return to work when they could see their partner struggling, physically after a c-section or traumatic birth or mentally with the brutality of postnatal depression. I have also spoken to fathers whose own mental health has suffered, leaving them struggling to meet their obligations to their family and to their employer, as well as safeguard their own well- being. The first year of a child’s life is one of the highest risks to relationship breakdown, and yet we give families just two weeks to adjust to the arrival of a new baby.

The social policy reasons for improving paternity leave go on and on. More engaged fathers in the early weeks and years lead to more engaged parenting in the long term, affecting children’s outcomes socially and academically.

I acknowledge the concern at the heart of the Bill about its impact on employers and growth. I have spent the weeks since Committee engaging with businesses and business organisations. I will not pretend that all businesses welcome this proposal without any reservations. They have to think about the impact it will have on covering absences, their productivity, their other staff and their bottom line. But despite these concerns, they have all seen the value in improving paternity leave for their employees, who are able to make the transition to parenthood more successfully, but also for their business in terms of recruitment, retention and productivity of employees.

That is why those who can afford to already offer enhanced leave to fathers. More than 180 organisations in the UK already offer at least six weeks at 100% of pay. Smaller businesses, reliant on a government rebate from the statutory scheme to cover the costs, cannot afford to expand their offer without that support. That means the cost of any expansion to paternity leave must be covered by the Government and therefore the taxpayer. In the current fiscal context, that is not something I take lightly, but we have overwhelming evidence that the benefits will outweigh the costs. Increasing paternity leave to just six weeks at an adequate rate of pay leads to a significant change in caring dynamics within a couple when they have children. That shift enables more women to make the choice to return to work or to work more hours.

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Women’s employment rates drop from around 90% before having children to 75% afterwards. Of course, it is down to every family how they choose to balance work with childcare, but the evidence is that our current system is constraining those choices. In countries that have six or more weeks of properly paid paternity leave, women’s labour market participation is four percentage points higher. Not only will that make a significant contribution to economic growth but the increased tax revenue has the potential to offset up to four-fifths of the cost of the government rebate to business.

The wider economic benefits have been estimated to be worth up to £2.68 billion a year. I know the Treasury can be sceptical about such calculations, but when Jeremy Hunt expanded childcare provision down to children nine months or older, the benefit of increased labour market participation, mainly from women, led

the OBR to estimate that it would increase GDP by up to 0.2% a year—the biggest single upward estimate to growth based on a government policy decision that the OBR had made in its history.

Of course, the Government know all this already. I hope that means they can commit today that the review will lead to action. That is all I am asking on behalf of the 600,000 fathers and second parents welcoming a new baby each year. If they cannot commit to reaching six weeks at 90% of pay by the end of this Parliament, to support families and businesses, I intend to test the opinion of the House. I beg to move.