‘A new deal on paid parental leave can’t wait’

In his New Year message our prime minister offered real hope but acknowledged public frustration with the pace of change. The government review of parental leave and pay is a case in point. Launched in July 2025, the review is not due to conclude until 2027.

Most of us remember that moment when our newborn baby was placed in our arms as the happiest of our lives. But working parents worry about how much time they can afford to take off, not least when the price of baby milk and nappies has gone through the roof.

This year alone, more than 600,000 babies will be born in England and Wales. While Labour’s groundbreaking Employment Rights Act makes parental leave a day one right, many parents will struggle to use it. The reason is simple. Most statutory parental leave is either low-paid or not paid at all.

READ MORE: ‘The government’s workers’ rights agenda must include self-employed people too’

Shockingly, the statutory rate of pay equates to less than half the national minimum wage. All the paid statutory entitlements are at a maximum rate of £187.18 a week. The exception is maternity or adoption pay which is paid at a rate of 90 per cent of the employee’s average weekly earnings for the first six weeks of leave, but then reverts to the lower statutory entitlement for up to 33 weeks.

Joining a union is the best way to get a fair deal but union negotiators rely on a decent platform of statutory rights to build on. And UK parental provision has fallen far behind our European neighbours. Other countries recognise that, as well as improving family health and wellbeing, boosting men’s take-up through better paid leave helps close the gender pay gap and keep women in the workforce.

Whereas in the UK, many families feel stuck. The Coalition government’s introduction of shared unpaid parental leave rights in 2014 has passed many families by. Even those who can afford to take unpaid leave find, from a household budget perspective, it makes sense for the parent on the lowest wage to do so. Generally that means the woman, compounding the ‘motherhood penalty’.

And what about working class fathers? I vividly recall a group of delivery riders telling me about their hopes for the future. Many of those young riders were already dads and earnestly wanted to be good ones. They wanted more time to bond with their new babies, and the opportunity to attend medical appointments and school plays. A right to a mere two weeks low-paid paternity leave for new fathers and partners was hard enough. But with precious few savings in the bank, taking unpaid parental leave rights was an impossibility. Those on sham self-employment contracts were shut out of many basic rights altogether.

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So why take so long with the review when reform is urgent? Some may grumble about cost. But nowadays, for most families, having a baby is a once – or, at most, twice – in a lifetime experience. The cost of paid parental leave equates to a tiny fraction of both employers’ annual pay bills and the UK’s annual tax revenue. Whereas upfront benefits to business and the wider economy could be significant.

For example, economic modelling by the Joseph Rowntree Foundation and CPP shows that extending statutory paternity leave to six weeks paid at 90 per cent of average earnings could generate a net economic gain of £2.68 billion as more mothers return to work and increase their hours. Factoring in the boost to tax receipts, the net cost to the Treasury would be just £220m.

Others may try to argue that employers have enough on their plate with Labour’s Employment Rights Act. It is true that the Act heralds a vital upgrade of labour standards, from better sick pay and a ban on exploitative zero hours contracts, to the promise of a Fair Pay Agreement in social care. But it would be a mistake for Labour to concede that better rights for working parents are somehow a burden on business.

On the contrary, relieving pressure on families and creating a level playing field for business is both fair and good for growth. Decent firms that already top up statutory parental provision attest to real savings on talent waste and turnover, and higher workforce morale and productivity.

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After fourteen years of Conservative cuts and neglect, our government’s programme of national investment to build council homes, fix the NHS and sort out social care will be transformative. But it may take years before families feel the full benefit. In the meantime, we need more quick wins.

Labour can change daily lives in a way that every new mum and dad would remember forever and cherish. We need a new deal on paid parental leave. The sooner, the better.

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