Full review of parental leave and pay launched over claims current system is 'not working'
Ministers have launched a full review to overhaul parental leave and pay as the UK birth rate continues to plummet.
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Business Secretary Jonathan Reynolds said a full review had been launched into maternity leave, paternity leave and shared arrangements as the system was "not working" for new parents.
It comes after the chairwoman of the Women and Equalities Committee warned that the UK had one of the "worst statutory leave offers for fathers and other parents in the developed world".
Currently, maternity leave is paid at 90% of average weekly earnings for the first six weeks, and then whichever is lower of that 90% or £187.18 for the next 33 weeks.
New fathers can take two weeks’ paid leave, at a rate of either £187.18, or 90% of average weekly earnings, whichever is lowest.
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Ministers hope to increase the take-up of shared parental leave, which allows a couple to share up to 50 weeks of leave and 37 weeks of pay between them.
They also hope to simplify the system for both parents and employers, with the Business Secretary pointing to “eight different types of parental leave”.
Mr Reynolds told PA: “We want this to work for millions of families who tell us at the minute that it is not working, so only about one in three new dads take paternity leave, mainly for financial reasons."
Businesses would be "absolutely integral to the review" but not face extra burdens, he added.
Mr Reynolds said: “They tell us the current system is quite confusing, that people don’t know what they’re entitled to, that businesses don’t know what they should be offering.”
He also insisted that bolstering parental leave would boost the economy.
"Of course, business themselves, the growth argument is this: the more people we can keep in work, because they’re able to spend some time with their children in those really important first few months and weeks, if we can do that, that’s obviously going to strengthen the economy as well," Mr Reynolds added.
Deputy Prime Minister Angela Rayner similarly described support for parents as “vital for our economy”.
She added: “Through our plan to make work pay, we’re already improving the parental leave system with new day one rights. This ambitious review will leave no stone unturned as we deliver for working families.”
The review will gather opinions from parents, employers and experts across the UK and end with a series of proposals for reform.
Official data from the Office for National Statistics shows fertility rates in England and Wales dropped to 1.44 children per woman in 2023, the lowest level since records began in 1938.