Employment Rights Bill

Committee (3rd Day) (Continued)

Debate on Amendment 76 resumed.

My Lords, I support Amendments 127, 128 and 139 in the name of my noble friend Lady Penn. In so doing, I declare my interests as an employer and as the father of a four month-old son.

The amendments in this group seek to deliver a fairer, more modern and more economically rational approach to paternity leave in this country. They are modest in scope but transformative in impact. They are not about political ideology; they are about justice, equality, family well-being and economic prudence.

The case for action is overwhelming. Today in the United Kingdom we grant mothers 52 weeks of maternity leave. Fathers receive just two weeks and are paid a mere £187.18 per week for it, which is less than half the national living wage. That is not support, it is a symbolic gesture, and one that fails our families, our economy and our vision for a truly modern and inclusive society. As we have heard, the UK has the least generous paternity leave system in Europe and we rank 40th out of 43 OECD nations. While 22 OECD countries offer six weeks or more of well-paid reserved paternity leave, the UK offers just 0.4 weeks of full-time equivalent paid leave. Is that the legacy that we wish to defend?

The amendments seek to correct that imbalance. They would do three vital things: make statutory paternity pay a day-one right, just like paternity leave will be under the Bill; increase paternity leave from two weeks to six and raise the rate of pay to 90% of the father’s salary, capped at median earnings; and require transparency from large employers by mandating the publication of their parental leave policies. Each of those proposed reforms is supported by robust evidence, each is economically justified and, perhaps most importantly, each is backed by overwhelming public support.

The Government rightly propose to make paternity leave a day-one right, yet they do not extend that logic to pay. What message does that send—that a father may take time off but must go without income to do so? Incidentally, it is worth noting that that is currently the arrangement in your Lordships’ House. Perhaps if the Government are about fairness and workers’ rights, as they purport to be, that may be something that they wish to take up with the commission.

Research shows that the biggest barrier to fathers taking paternity leave is affordability. Nearly three-quarters of those who cut their leave short did so because they could not afford to stay off work any longer. What use is leave if it is unpaid?

Why six weeks, and why 90% pay? It is because we know, from the experience of countries such as Sweden, Germany, Spain and beyond, that reserved well-paid leave for fathers leads to profound benefits for families, for women’s equality, for children and for national prosperity. OECD data shows that, in countries offering fathers six weeks or more of well-paid leave, the gender wage gap is 4% smaller and women’s labour force participation is 3.7% higher. Why? It is because shared caregiving allows mothers to return to work sooner and on fairer terms.

However, this is not just a women’s issue; it is a fairness issue for all parents, and smart economic policy. The economic argument is striking. Closing the gender pay gap could boost UK economic output by £23 billion, while increasing paternity leave to six weeks at 90% pay could generate an immediate economic benefit of £2.6 billion. That is based on sound modelling endorsed by reputable analysts, including the Joseph Rowntree Foundation.

Moreover, 90% of businesses surveyed by the CBI say that inclusive workplace practices help them to attract and retain talent. Nearly three-quarters of employers that offer enhanced paternity leave report higher productivity—we were discussing productivity rates in this country in earlier groups; this is a solution to help that—and employee engagement. So let us discard the myth that this would be a bureaucratic cost; in truth, it would be a smart investment for business.

Let us also remember the human case. Better paternity leave benefits children. As my noble friend Lord Bailey said earlier, children with engaged fathers show higher academic achievement, greater resilience and stronger social skills. It benefits mothers: when care is shared, women can more easily return to the workplace and pursue their careers. It benefits fathers: longer paternity leave leads to better mental health—something that we also heard about earlier—stronger father-child bonds and more engaged parenting throughout childhood. If we want to build a society where men are not just allowed but expected and supported to care for their children, then this is the place to start.

The public are with us on this point. Some 81% agree that more generous paternity leave is good for families and for the country. Support crosses party lines: Labour, the Conservatives, the Liberal Democrats, the SNP and Reform all back this measure. This is not a fringe issue; it a mainstream demand and a moral necessity.

We have what is perhaps a once-in-a-generation opportunity to reshape the way this country supports fathers, mothers and children in their earliest days together. The proposed amendments are reasonable, grounded in evidence and long overdue. I urge the Government to accept them.

My Lords, it is a pleasure to follow the noble Lord, Lord Harlech, who made a compelling case for these amendments. I rise to speak in strong support of Amendments 139 and 76, tabled respectively by the noble Baronesses, Lady Penn and Lady Lister.

The UK’s statutory paternity leave—just two weeks, paid at £187.18 per week—is the most limited in Europe. In many OECD countries, six weeks’ leave at the equivalent of full pay is standard. By comparison, our offer is inadequate and outdated.

Eligibility for paternity leave is also restricted. It requires continuous employment with the same employer for 26 weeks before the 15th week prior to the due date. That excludes many fathers, especially those in insecure work, the self-employed, or those working in gig economy roles. Many are forced to take unpaid leave or use holiday just to be present at the start of their child’s life.

The impact is significant. The TUC reports that over half of families struggle financially when a parent takes paternity leave, and one in five do not take the leave they are entitled to, mostly for financial reasons. Research from Pregnant Then Screwed found that 70% of fathers who did not take their full leave had to cut it short due to cost.

This is not just about finances; it affects bonding with the child and support for the mother or birthing partner, and it reinforces gender inequality in unpaid care. The lack of accessible leave for fathers limits shared parenting and is a contributor to the gender pay gap and future pension pot inequality.

The Employment Rights Bill includes provisions to address some of these issues. Clauses 15 and 16 remove the qualifying periods for unpaid parental and paternity leave. Clause 17 removes the requirement to take paternity or adoption leave before parental leave, allowing paternity and adoption leave to be taken following shared parental leave. However, these clauses fail to tackle the low level of statutory paternity pay, or to extend fathers’ and second parents’ leave entitlement past two weeks.

My Lords, I rise to speak in support of Amendments 127, 128 and 139 in the name in my noble friend Lady Penn.

I would like to think that the birth of any child is an important day in the eyes of the father as well as the mother; yet, when it comes to the parental leave granted by companies, they are treated very differently: up to 52 weeks for the mother and two weeks for the father. On this basis, as we have heard, the United Kingdom compares very unfavourably with other European nations. In addition, 22 OECD nations offer more than six weeks, paid at the equivalent of 100% of salary.

The Government’s weekly rate of statutory pay, for the two weeks that it is paid to fathers in this country, is currently the lesser of £187.18 or 90% of average weekly earnings. This is a modest amount by any measure, given that the average full-time working man is paid just under £700 per week.

We have heard from other noble Lords of the benefits to fathers themselves, as well as mothers and children, when fathers are permitted to spend longer with the family in the early period of a child’s life.

I wish to draw on my personal experience. As I have said before, the company that I work for—Marsh, a very large insurance broker—now has a mature policy on paternity leave. Fathers are allowed to take up to 16 weeks’ leave, and the company ensures that they continue to be paid the equivalent of 100% of their salary during their time away from the workplace. Importantly, their job remains open for this period to facilitate their return. This benefit was not available to me when my sons were born in the 1990s—unlike the noble Lord, Lord Russell of Liverpool, I have not yet reached grandfatherhood.

The time allowed must be taken within 52 weeks of the birth of the child, or children in the event of a multiple birth. I am sure that our competitors offer something similar, as competition for staff is an ongoing issue, and benefits count enormously in any discussion should a member of staff wish to change employer. Such a policy helps to define the culture of a company that cares not only for itself but also for the lives of its colleagues.

My Lords, I support Amendment 127 from my noble friend Lady Penn. I declare an interest—which I am increasingly discovering to be a growing financial interest—in the form of my two daughters, who are the most precious things to me.

I confess that I am glad that it is my noble friend Lady Penn who is leading the charge on this amendment, and the noble Baroness, Lady Lister, leading the group. I rise with some trepidation. I am not alone in being conscious that, in speaking to this amendment, as a man I am putting myself slightly in the firing line by somehow implying that a man should have exactly the same as the woman who has just carried and given birth to the child. As has been said, this is not about more rights for the man. It is more than that. It is about ensuring a dad can be at home to play their part for the child and, crucially, be there for the mum.

I am lucky and immensely grateful that, on both occasions when my wife gave birth to our children, I had two supportive bosses, one of whom I am delighted to say is still my boss, in the form of the Opposition Chief Whip. When the time came, my noble friend worked to give me the support and time I wanted to be with my family. When I was in the Government Whips’ Office, I worked with colleagues—two of whom I am pleased to see here, in the form of the noble Lords, Lord Evans and Lord Harlech—to ensure that we all got the time at home that we wanted, especially me. This is not unique, but I was lucky: lucky that it was offered, lucky that it was an open dialogue, lucky that I could ask for what I would like without recourse and was completely understood, and lucky that the support extended beyond the time I was at home. I was also lucky that my child was healthy and lucky that I had my in-laws around to help out.

Like so many in the country, I wanted to be at home to help, but also to share those early moments—the precious moments in a young child’s life that were mentioned earlier. I was there to help, tidy, ferry, feed, give cover and support my wife, who was recovering after surgery. To explain my personal circumstances, both of my children’s births were not simple. The first required emergency surgery, and then a return to hospital for another stay a week after coming home. Our second child’s birth was also complicated. Despite being a planned caesarean, the surgery did not go well and it required weeks of hospital visits. There is no way at all that my wife, on her return, could have looked after a newborn child, never mind our eldest or, indeed, herself.

My Lords, I will speak very, very briefly. It is heartening to hear support for the amendments in this group right across the House. I will speak in particular to those from the noble Baronesses, Lady Lister and Lady Penn. I have already shared with the noble Baroness, Lady Penn, that, when I was at the TUC, I very, very vividly remember having conversations with young men who were working as riders and delivery drivers, and they really, really wanted to be good dads. They had young babies and children, and what was most important to them—and I hope others will reflect this in paying attention to how we make working families’ lives better—was predictability of shifts and guaranteed hours, so they would know how much money they could earn, but they also wanted paid paternity leave.

To keep this really, really brief, I have a couple of questions for my noble friend the Minister before she responds. First, can we accept that the starting point for a review would be to recognise that, compared with other countries, the UK is so ungenerous in its paid paternity leave? We do not need a huge review to know that; it is our starting point. If we are to move into the 21st century, we also need to recognise that new dads from all sorts of backgrounds want time to bond with their babies and be involved more equally in their care. Secondly, will this review focus specifically on paid paternity leave, working from the simple premise that, unless it is paid, there are whole swathes of new dads who simply cannot afford to take it?

I have been encouraged by the discussion around the House. I think there is a cross-party consensus that we all want to see new dads having that opportunity. We all know it will bring benefits for women—including closing the gender pay gap—and opportunities for children to have a better life, too.

My Lords, I thank my noble friend Lady Penn for her very thoughtful amendments in this group. I acknowledge the valuable contributions from all noble Lords, in particular the noble Baroness, Lady Lister, for introducing her amendments, and the noble Lord, Lord Palmer of Childs Hill, for introducing his amendments and, perhaps more importantly, reminding the House of the Conservative-led coalition Government’s work in this area—although I note that he did not heap praise on the then Secretary of State for Work and Pensions, my right honourable friend Iain Duncan Smith.

We fully recognise and support the intention behind these proposals, which is to strengthen support for families and in particular to enhance the role of paternity leave in allowing fathers to spend essential early time with their children. This is a laudable aim that clearly finds broad sympathy across the House.

However, while the objective is clear and commendable, we must also consider the practical implications of how such policies are implemented, particularly in relation to the impact on businesses. Many employers, large and small, continue to face significant challenges in the current economic climate, as we have discussed at length this evening. The introduction of new requirements, even when limited to large employers, must be approached with caution and care, and I acknowledge that my noble friend Lady Penn addressed many of those concerns directly in her speech.

As for the reporting obligations set out in Amendment 128, tabled by my noble friend, these would apply to businesses with 250 employees or more. While this threshold helps to focus the requirement on larger organisations, we should still be mindful of the potential administrative and financial burdens such reporting could entail. Even within that category, resources vary significantly, and not all may be equally equipped to take on new reporting functions—a point that was addressed by my noble friends Lord Bailey and Lord Ashcombe. That said, transparency and data collection can play a valuable role in shaping effective policy. If it can be clearly demonstrated that these measures would bring mutual benefits, improving employee well-being and retention, for example, without imposing disproportionate costs or complexity on employers, it is certainly something that we should be prepared to consider further.

My Lords, this has been a wide-ranging, informative and very exciting debate. I thank all noble Lords who have contributed. I take this opportunity to congratulate the noble Lord, Lord Harlech, on his four month-old son. I begin by recognising the key role that parental leave plays in supporting families—I wish it had been available when I became a father, at a much older age, some 18 years ago. I thank the noble Lord, Lord Gascoigne, for sharing his story about the difficult time he had during the birth of his children.

This Government understand that the arrival of a child, whether through birth or adoption, is the most transformative time in a family’s life. We understand that the current parental leave system needs changing so that it better supports working families. We have committed to do this and we are taking action in a number of different ways. Through this Bill, the Government are making paternity leave and parental leave day-one rights, meaning that employees will be eligible to give notice of the intent to take leave from the first day of employment. I hope that many noble Lords will welcome this position. This brings such leave in line with maternity and adoption leave, so simplifying the system.

The Minister said that this brings paternity leave in line with maternity leave, but for maternity leave, the right to pay is also a day-one right. Does he acknowledge that the Bill does not create alignment between maternity and paternity?

The noble Baroness is absolutely right. I just said that the leave is the same as maternity leave, not the pay. This brings paternity leave in line with maternity leave and adoption leave, thereby simplifying the system. We are removing the restriction preventing paternity leave and pay being taken after shared parental leave and pay, to further support working parents in assessing the entitlements available to them. Separate from the Bill, planning work is under way for the parental leave review, which will explore how well the current system supports working families and what improvements could be made.

Amendments 127, 80, 138 and 139 seek to make changes to paternity leave and pay. Amendments 127 and 139 are in the name of the noble Baroness, Lady Penn. Amendment 127 seeks to extend statutory paternity leave and pay from two weeks to six weeks and to increase the rate of pay to the lower of 90% or national median pay—although the drafting relates specifically to pay. Amendment 139 seeks to make statutory paternity pay a day-one right for all employees by removing the current continuity of working requirements. The noble Lord, Lord Palmer, has laid two similar amendments, Amendments 80 and 138. Amendment 80 would increase the minimum length of paternity leave from two to six weeks and require regulations to introduce the ability to take paternity leave at any time in at least the first year following birth or adoption. Amendment 138 calls for the existing flat rate of statutory parental payments to be increased, by doubling the rate from £184.03 to £368.06.

I hope to reassure the noble Baroness and the noble Lord, in part by highlighting several reforms to paternity leave and pay which took effect in April last year. These changes now allow eligible parents to take their leave and pay in two non-consecutive weeks; to take their leave and pay at any point in the first year after the birth or adoption of their child, rather than only within the first eight weeks, as was previously the case; and to give shorter notice for each period of leave. I hope that the noble Lord, Lord Palmer, will therefore agree that, while well-intentioned, Amendment 80 is not necessary in relation to when paternity leave is taken, for the reasons I have just explained.

I turn now to parental pay. Amendment 139 would make statutory paternity pay a day-one right. Currently, no parental pay entitlements are available from day one, including maternity pay.

Will the noble Lord clarify whether he just said that there are no day-one rights to parental pay, including for maternity?

I will read it again. Amendment 139 would make statutory paternity pay a day-one right. Currently, no parental pay entitlements are available from day one, including maternity pay.

Does the noble Lord acknowledge that maternity allowance is available from day one, at the same rate of pay as statutory paternity pay?

The noble Baroness is absolutely right: maternity allowances are available from day one.

Parental pay entitlements require employees to meet an average earnings test. Calculating whether newly employed parents have met this threshold would present a significant challenge to their new employers who administer parental payments.

Amendments 127, 138 and 139 would introduce a cost burden to the Exchequer at a time when public finances are under pressure. When considering calls to increase the level of parental pay generally, any changes will need to take account of the economic situation, the financial impact on employers and the needs of parents, and be made in consultation with businesses and stakeholders. The Secretary of State for Work and Pensions is required by law to undertake an annual review of benefits and state pensions, including statutory payments. This is based on a review of trends in prices and earnings growth in the preceding year. Generally, as with other benefits, parental payments are increased in line with CPI. For example, statutory maternity pay, statutory paternity pay and statutory adoption pay will all increase by 1.7% in April 2025, in line with the September 2024 CPI figure.