Cost of Living: Parental Leave and Pay

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Monday 19th June 2023

(10 months ago)

Westminster Hall
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Mims Davies Portrait The Parliamentary Under-Secretary of State for Work and Pensions (Mims Davies)
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It is a pleasure to serve under your chairmanship, Mr McCabe. I thank hon. Members for joining us this afternoon. In particular, I thank the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) for introducing the debate so thoughtfully.

As we have heard, being a parent is an incredibly important and rewarding job. It is one that comes with a unique set of challenges, from recovering from birth with a newborn to balancing employment and care and, in my own life, being a sandwich carer, so I absolutely understand the challenges. While I have the floor, I pay tribute to local firefighters who were battling a fire in Burgess Hill in my constituency just this afternoon, with members of the public being sent home and asked to be vigilant after another one yesterday in Sharpthorne. If you will indulge me, Mr McCabe, I thank them very much.

An 18-year-old will be coming into my house very shortly, and another teen. As a single mum and a woman returner, I really do get it, and I hope that some of my remarks will reflect that. I will be clear that I cannot answer all the issues, because they are not all in my remit, but I will undertake to write and share what I can and bring other Departments to account.

Last week was Loneliness Awareness Week. As parents, I think we have all felt incredibly lonely and isolated. Being a single parent can be overwhelming and incredibly difficult. It can be hard work; the pressures are not new, but they are definitely challenging right now. Overall, it is a wondrous, joyous slog—let us all be honest about that. Just after fathers’ day, we reflect that the boost for gender equality and equal parent support is vital. I thank Nicola for being here today, and all the groups and charities that support parents through this precious and—as we all recall, if ours are a little older—challenging time.

Speaking of baby boxes, on a slightly different point, I remember that my mum and dad gave me a war chest. They had been struggling with long-term illness and not having a huge amount of money, but it was a labour of love and of many trips to Poundland, and it really made a difference. We know that everything makes a difference at the start, when the parent is feeling the pressure and has had a big change in their life, particularly if the child is their first. Of course, added to that are high inflation, the cost of living challenges and global pressures, which make it very difficult to look after that precious little bundle. That is why it is important that in April we increased the rate of all statutory parental payments by 10.1%, in line with CPI, and we will continue to take decisive action to help households. I will outline some more of what we are doing shortly.

It is our firm belief that the best way to help people improve their financial circumstances throughout their life is through work, but, as the hon. Member for Newcastle upon Tyne North said, only when the time is right. It is important that people are given a choice, so I strongly agree with the points she made. We need to be ambitious in enabling parents to progress in work; it must not be only people without children who can do that, so we need to get things right. We need to support children by enabling their parents to be there when they want. That is equally valuable, and the flexible parental leave entitlements for new parents support just that.

I recognise that this is a complicated area, as hon. Members have said—I have taken their points on board. It is also vital that adopters get a better deal and more assistance. My wider family has experience of that, and it is really important too.

Parents must have access to the range of support and entitlements they need for their child’s first year. We are giving working families more choice and flexibility about who cares for their child when the parents are at work. Our statutory maternity leave entitlement is rightly generous, but hon. Members have said it is not generous enough—if only I had a magic wand. We offer 52 weeks of maternity leave, of which 39 are paid through statutory maternity pay. For self-employed women, who are not eligible for statutory maternity pay—I was one, so I very much understand the insecurity—maternity allowance is available. Both payments are designed to enable women to stop working towards the end of their pregnancy and in the precious months after childbirth. That is in their and their baby’s best interest; it supports their health, wellbeing and, above all, bonding.

I fully recognise the role that fathers can and must play in that crucial time, their child’s first year. We have a real opportunity to boost gender equality and support parents; I will say more about that later. Statutory paternity leave and pay arrangements enable employed fathers and partners who meet the qualifying conditions to take up to two weeks of paid leave within the first eight weeks following the birth of their child or placement for adoption. Qualifying parents can share up to 50 weeks of leave and up to 37 weeks of pay. The hon. Member for Twickenham (Munira Wilson) rightly said that shared parental leave gives mothers who wish to return to work the opportunity to do so, and rightly enables the father or partner to be the primary carer if they wish.

We want more men to confidently take the helm. Employers can really help with that by understanding that dads want and need to be there at key moments, not just the nativity or the parents evening. In fact, I am the guilty party who is never there for the parents evening, so it is flipped around in my world these days. If men can confidently be there, perhaps, as Opposition Members said, we can boost the take-up of the scheme, which started in 2015. We forecasted that between 2% and 8% of eligible couples would take part, and the actual take-up is broadly in line with that. It is increasing each year, but not fast enough. That is the challenge for us all: how we make the scheme something that people really feel they can take part in. In order to do that, the shared parental leave online tool is accessible for parents to check their eligibility and plan their leave together. We are currently evaluating the shared parental leave scheme and will publish our findings in due course.

There has been a clear message today on rates. The rate of all statutory parental payments is reviewed annually and, as mentioned, generally increases in line with the CPI. The Government will spend around £276 billion in 2023-24 on welfare support in Great Britain. I will come to further support for those who may be listening this afternoon who perhaps have not reached out for additional help. I understand the point made by the hon. Member for Newcastle upon Tyne North about the slightly indelicate link between out of work benefits and the support that we give to parents. I note her comments on that, and pretty much agree with her. I will take that away in terms of how we talk about supporting people who are out of work, and how we support pregnant working women when they are in the special position—let us be honest—of coming to the point when they want to do what is right for them next, and new mothers.

The Government spend approximately £3 billion on maternity payments. There is a balance to strike both in language and in any changes to the rate of SMP, taking account of economic circumstances and affordability for taxpayers. We also need to speak to stakeholders, some of whom have been mentioned, and businesses. It needs to be a holistic effort. The hon. Member for Ellesmere Port and Neston (Justin Madders) gave a list of future plans that he may have, but in reality we want to ensure that we hear the asks both of the petitioners who have challenged us this afternoon and of the sectors and businesses, to ensure that we take people on any change journey. We have talked about planning, saving and spreadsheets where needed. I was—briefly, it feels like—married to an accountant, so I felt as if I was living in a world of spreadsheets. It is what we all have to do, and it is a challenge, particularly when we do not know what we do not know when it comes to parenting, and the impact that it will have on our back pocket.

I think employers can do more. The work of the civil service was mentioned. We have a very tight labour market. Consider a talented, skilled, brilliant woman who is adopting or becoming a mum in whatever way, whether for the first time or growing her family. Employers really need to think forward about job design and making it work for such women to return. I mentioned that I am a single mum; when I came to this place, I was a woman returner. Many of us are, and many mums, for various reasons, have been locked out of the labour market for far too long. They have incredible ability and talent. Employers have a chance to look at job design. In my constituency, Boeing has created a deliberate part-time role—not a role where a person squeezes full time into part time, but an actual role where they add value in a way that works for their circumstances. If we have more people in the labour market doing more, everyone will do better, so let us all challenge ourselves on that.

I have been given an extremely long speech, so I will try not to repeat things that many people will know, and will try to answer some of the questions. Hopefully I have covered the way in which things are calculated and equal access for adoptive parents. I agree with the point on the Healthy Start scheme needing a boost with regard to take-up. I will take that away to work on with colleagues. I think the hon. Member for Newcastle upon Tyne North made a fair point on outcomes and monitoring, and I note that.

My friend the hon. Member for Strangford (Jim Shannon), talked about tax relief, which was reiterated by the hon. Member for Glasgow East (David Linden). I am not in the Treasury, and I am delighted about that every day; until I get the call-up, I will pass on that headache for as long as possible. I say that very gently—did I actually say that out loud? My point is that it is a matter for the Treasury. I am sure it is listening and I will leave it to get on with it.

Regarding the Scotland Act 1998, I am delighted that the hon. Member for Glasgow East is using those powers. I note his point about under-25s; that is not my policy area, but he knows that I have a strong interest in youth policy and single parents. I undertake to understand his point and take it away.

For those listening to this debate who have a concern about mortgages, I said on the Floor of the House this afternoon, and I reiterate here, that if people are worried they should engage with their mortgage lender. There is support for mortgage interest out there. We have abolished the zero-earnings rule to allow claimants on universal credit to receive support while in work and on UC—support is now available after three months. People should engage with their lenders. We paid £25 million to 12,000 households in 2021-22 and we will continue to extend that support for mortgage interest rates. People should use the benefits calculator on gov.uk if they are concerned; there is help for households on that site and links to the household support fund, which I will come on to shortly.

The hon. Member for Glasgow East raised a concern about miscarriage leave. Miscarriages are a deeply challenging, personal and devasting experience for many women, as well as their partners and families. In this place we have got better at talking about such things, but it is still too unspoken and difficult in the workplace, which is something a friend of mine recently spoke to me about. The Government believe that individuals are best placed to know their own specific needs, and that good employers will rightly respond in a sensitive way to requests made by employees.

David Linden Portrait David Linden
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I do not intend to make this issue a party political point. Knowing the Minister very well, I think there is a genuine willingness to try and fix the issue. It is not something that should be hard. I caution the Government, however, that simply hoping that employers do the right thing is not something that we can rely on in this place. The Minister is right that the vast majority of employers would agree if an employee went to them and said, “I have had a miscarriage. Can I have some time off?” The reason that we legislate in this place is to ensure that the few are looked after. It is for that reason that it is important the Government look again and do not just leave it to the market. They should step in and do what the state does best.

Mims Davies Portrait Mims Davies
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I understand the point the hon. Gentleman makes. It is not an area that I am in charge of, but I am sure that those who are will be listening. Of course, if a woman unfortunately has a miscarriage, there are protections that extend to two weeks after the end of that pregnancy. That is a protection under the Equality Act 2010. I understand, however, the hon. Gentleman’s point about what happens before 24 weeks. This is a difficult one, which is why Nicola and the other petitioners, by bringing the petition to the House and making us focus on all of the issues, did the right thing. I have nearly got myself in enough trouble this afternoon, without creating any more policy in this Chamber, so I will refrain from saying more on that one.

I appreciate the hon. Gentleman’s point on the two child policy. We disagree on that point in terms of families on benefits facing the same financial challenges and choices when it comes to growing their family as those who are supported solely through work. It is important that child benefit continues to be paid for all children in eligible families, but it is right that we continue with that policy where appropriate. The hon. Gentleman mentioned those particular exemptions. Again, I note that it is a challenging area.

Opposition Members raised the issue of support for childcare. It is important to provide the right support for parents who are balancing childcare and returning to work. The Government have already put in more than £20 billion in the last five years to support families with the cost of childcare, and thousands of parents have benefited from that support. However, more changes are coming. We announced in the Budget that by 2027-28 we will provide £4.1 billion to expand the current free childcare offer to eligible working parents of children aged between nine and 36 months. I recognise that Government-funded childcare, which is free to the recipient, needs design. That was mentioned to a degree in the Chamber this afternoon. We are expecting to spend more than £8 billion a year on that funding and early education, which represents the biggest ever single investment in childcare in England.

I will quickly cover neonatal pay and pregnancy discrimination and then try to conclude, because I am mindful that I have spoken for some time. We are aware that more needs to be done to support parents whose children are in neonatal care. Many of us in the House know people personally who have been impacted by this issue. Again, the House has come into its own by talking about it and its impact on families.

In March 2020, following a Government consultation, we committed to introducing a new entitlement to neonatal leave and pay. The Neonatal Care (Leave and Pay) Act 2023 will introduce an entitlement of up to 12 weeks of paid leave for parents whose child is admitted to neonatal care. The entitlement will support new parents during the most stressful days of their lives, ensuring that they can be there for their youngster. The Act received Royal Assent on 24 May this year, and we anticipate that the entitlement will become available to parents in April 2025. I hope that that helps hon. Members.

David Linden Portrait David Linden
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The Act was originally my Bill, so I am familiar with it. There is a slight issue with His Majesty’s Revenue and Customs dragging its heels. Notwithstanding what the Minister said about not being a Treasury Minister, will she at least write to HMRC following today’s debate, outlining that there is cross-party agreement? Indeed, the hon. Member for Thornbury and Yate (Luke Hall) has been excellent on this issue. There is cross-party agreement that £50 million has been committed in the budget line, but there is no need for us to wait that long because of the lag in HMRC guidance.

Mims Davies Portrait Mims Davies
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I understand the hon. Gentleman’s point. I know it was a deeply personal Bill for him and he will be strident on this issue. I will take away that ask as he wishes.

I turn to pregnancy and maternity discrimination protections. Ensuring that parents have the leave and flexibility that they need during this period is important, as is ensuring that they are protected against discrimination and do not suffer any detriment for taking that leave. That is why we are rightly extending pregnancy and maternity discrimination protection for those returning from periods of eligible parental leave. The Protection from Redundancy (Pregnancy and Family Leave) Act 2023 will enable redundancy protections to apply from the point at which an employee told their employer that they were pregnant, until six months after returning from maternity, adoption or shared parental leave. The provision will protect individuals from redundancy and help mothers to remain, rightly, in the workforce.

Support needs to go way beyond the first year of a child’s life, so it is important that there are further entitlements for others. Time off for dependants is important as well, and I will update the House further on that.

It is important for me to cover flexible working. We are fully committed to ensuring that parents get the support that is right for them. The Employment Relations (Flexible Working) Bill received its Second Reading in the other place on 19 May. That Bill will increase the number of requests that an employee can make in a 12-month period, reduce the time allowed to administer requests, and support more effective conversations about what flexible working arrangements may work to the benefit of both employer and employee. Alongside the Bill, the Government will introduce regulations, as mentioned, to make the right to request flexible working apply from the first day of employment, bringing an estimated additional 2.2 million employees into the scope of the legislation. My understanding is that as soon as parliamentary time allows, this will be moving forward.

I mentioned cost of living support. Statutory parental pay is only one aspect of Help for Households. There is support worth £94 billion across 2022-23 and 2023-24 to help people with rising bills; the support is worth £3,300 per UK household on average. Included in that are cost of living payments to more than 8 million low-income households, about 6 million disabled people and more than 8 million pensioner households. I would say to anybody, “Please look at the benefits calculator. Please look at Help for Households. Please reach out to your local council or your devolved Administration, because there is extra support out there.”

I will close by reiterating the Government’s commitment to supporting parents as we continue to face high inflation. We understand the added, varied and complex pressures that we have heard about and discussed this afternoon, which parents are experiencing alongside the cost of living and inflation challenges. That is why we have done the right thing with the uprating, in line with CPI, of statutory parental payments—alongside other payments—by 10.1%. We will continue to take decisive action to help all households.

I thank all hon. Members for their contributions this afternoon, and the hon. Member for Newcastle upon Tyne North for opening this petition debate. I will continue to support women—as long as I have breath, and a seat in this House—in any role that I have. It is great that we all come together on something that is so important. On some areas there will of course be disagreements, but as long as we continue to work together to support parents, at this most difficult time, in any part of our community—I am seeing some of my great local charities, the local food bank and other supporters on Monday; there is additional support from the Department for Culture, Media and Sport, by the way, for local charities—we will really make the difference and ensure that no parent, whatever their situation, and no family ever feel alone.