Maternity leave payment reform would cost Britain £2.5 billion

Maternity leave payment reform would cost Britain £2.5 billion

Plans to extend maternity leave across Europe to 20 weeks on full pay will cost the UK Treasury an extra £2.5 billion a year, a report claimed yesterday.

The controversial change to the EU’s Pregnant Workers’ Directive was put on hold by MEPs in March amid protests that it would mean a massive extra burden on British business if it became law.

Now the “impact assessment” demanded in particular by British Tory MEPs estimates the combined extra financial burden at €121.18 billion (£101.636 billion) between now and 2030.

The UK would bear 47 per cent of the total says the report – £47,832 or £2.5 billion a year.

The British Chambers of Commerce, which called six months ago for the maternity provisions to be abandoned, described the figures – which only cover 10 out of the 27 EU countries affected – as “eye-watering”.

BCC head of European affairs, Kieran O’Keeffe, said: “This Directive should be about setting minimum EU standards for the health and safety of pregnant workers - not adding new payroll costs for overburdened companies and national social security systems.

“These figures confirm that the Parliament’s proposals are completely unaffordable as governments across the EU seek to deal with budget deficits and the aftermath of recession.”

Mr O’Keefe added: “The European Commission’s original proposal to extend maternity leave to 18 weeks, but with individual member states allowed to decide the level of pay, is a better, more affordable option.”

Current UK rules give pregnant women a full year off, with just six weeks paid at 90 per cent of the mother’s average pay, followed by 33 weeks on Statutory Maternity Pay of £124.88 a week – 55 per cent higher than sick pay. The rest is unpaid.

Under existing EU rules agreed in 1992, minimum maternity leave is set at 14 weeks, with pay for the duration to be no lower than sickness pay in the member state concerned.

The results of the survey will now be considered by MEPs ahead of a vote next month – but the BCC said it would be difficult to draw conclusions from a partial survey of the costs and benefits which leaves out 17 EU countries.

Employment relations minister Edward Davey said: “Negotiations on the Pregnant Workers Directive are of crucial importance to the UK.

“Our own analysis shows that the amendments put forward by MEPs on maternity pay would cost us up to £2 billion. To put this into context, we currently spend around £2 billion a year on maternity pay - meaning the cost would effectively double.

“This is a substantial increase at a time when economies across the EU can least afford it.

“Across government we are ­lobbying hard to get the right deal for the UK, and I will continue to flag my concerns to counterparts from other member states.”

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