Will Miliband’s pledge to double paid paternity leave inhibit business growth and productivity?
John Longworth, director general of the British Chambers of Commerce, says Yes
Businesses have had to manage half a dozen changes to parental leave in the past decade. While these changes are a step in the right direction for families wanting greater flexibility, Labour’s proposal is another burden for small and mid-sized businesses (SMEs) at a time when they need greater support to ensure growth.
The ink has yet to dry on changes to shared parental leave, so extending paternity leave from two weeks to a month will cause further challenges and hinder productivity for business. What if a father is to take one month’s paid leave, to then return to work and request shared parental leave as soon as he is eligible?
For SMEs that rely heavily on the talents of individual employees, this would be hugely disruptive. A “Father’s Month” may be well-meaning and may win votes, but it must be assessed as part of the wider costs to business – particularly at a time when growth is crucial to the agenda for the next government.
Rachel Reeves MP, shadow secretary of state for Work and Pensions, says No
Labour’s plan to give dads a month’s paternity leave is good for families and for businesses. Firms who help staff to play an active role in their children’s lives are more likely to have a productive and settled workforce. Shell and National Grid already offer enhanced paternity leave to staff. Companies wanting to retain the best people need to give staff time to spend with their children.
Some worry that businesses will incur the cost of extending paternity, but they don’t. Government meets the cost, funding the extension with the savings on childcare tax credits. When paid maternity leave was extended from six to nine months in 2007, some warned that it would be a burden for business. But does anyone say that now?
What we’ve seen are more women staying in the workforce, increasing growth and productivity. Increasing paternity leave will help dads and mums combine work and family, and help businesses build and maintain a productive workforce.