Parental Leave and Pay Review

Baroness Sherlock Excerpts

Tuesday 20th January 2026 Lords Chamber

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, the parental leave and pay review launched on 1 July 2025, and we expect it to run for a period of 18 months. The review will conclude in early 2027 with a set of findings in which the Government will outline next steps for taking any reform forward to implementation.

[Baroness O'Grady of Upper Holloway (Lab)]

My Lords, I thank my noble friend for that Answer, but does she accept that the case for change is urgent? Most forms of parental leave are unpaid or pitifully low paid: £187 a week equates to less than half the national minimum wage, and many mums and dads and partners simply cannot afford to take the pay cut necessary to spend time with their babies and children. The benefits are clear: there is compelling evidence that if, for example, paternity leave were increased to six weeks at 90% of pay, that would improve economic participation and growth and, of course, narrow the gender pay gap. Will my noble friend agree to consider urgently bringing the conclusions of the review forward so that young families can get the start in life they deserve?

[Baroness Sherlock (Lab)]

My Lords, I pay tribute to the advocacy not only of my noble friend but of her former employer, the TUC. The Government have met with many stakeholders and had many encouragements to act in lots of different directions. My noble friend is absolutely right that the system needs reform. We know that it does not work for everybody at the moment. Having a child is a joyous occasion, but it is a challenge for many parents. We need to get this right. The Government opened a call for evidence, and we had almost 1,500 responses. We need to consider those carefully and find a way forward that provides a proper balance for employers, employees and the Exchequer. We will get this right.

[Baroness Penn (Con)]

My Lords, the Minister referred to the call for evidence, which closed in August. I appreciate that there were around 1,300 responses, but it has been five months since then, with not a word of an update from the Government. Could we get an update from the Minister now on progress in that last five months and a clear timetable for what the Government will spend the next 12 months doing?

[Baroness Sherlock (Lab)]

My Lords, we are doing a number of different things. We are engaging in detail with stakeholders. We have already held 12 round tables, and we have engaged with business groups, academics and parent groups, including the CBI, the Federation of Small Businesses, the TUC, The Dad Shift, Mumsnet, and Maternity Action—lots of them. We are working through this with many academics, gathering all the evidence, finding out what we can do and looking at international comparisons. We are simply not doing nothing for the moment. We have already made a significant number of differences. The Government have introduced a range of things, such as neonatal care leave and pay, and we are looking at paternity leave and unpaid parental leave as day one rights, and at new leave for bereaved parents. There are a number of steps happening now, and we will look at whether there are things that can be introduced, and when, but we do have to get this right.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Minister very much for all the things that are happening, but can she confirm whether this urgent review—the word “urgent” was used—will look specifically at low-paid and self-employed parents, who are often excluded from adequate support? I did not hear the Minister mention them at all.

[Baroness Sherlock (Lab)]

The noble Lord raises a very important point. I am pleased to say to him that, yes, the review is considering specifically whether the current support available meets the needs of self-employed parents. That is explicitly referred to in the review’s terms of reference. He is right that, currently, self-employed mothers can get maternity allowance but self-employed fathers are not eligible for support. There are some challenges. The bigger challenge is that the scheme goes back to the late 1800s, and a lot of aspects of modern families and the modern workplace are not necessarily reflected in its structure. We are looking at all of that.

[Baroness Jones of Whitchurch (Lab)]

My noble friend has described all the action being taken already on this issue, which was a very important part of our debate on the Employment Rights Bill. We heard some compelling arguments then about the importance of making progress on this issue. In light of all the meetings my noble friend has described, is she prepared to convene a meeting of Peers on a cross-party basis to update us and make sure that the voices around the Chamber are also heard appropriately?

[Baroness Sherlock (Lab)]

My Lords, I thank my noble friend for that and pay tribute to all the wonderful work she did on the Employment Rights Bill. The whole country has good reason to be grateful to her. I am sure she still bears the occasional scar, which she may polish occasionally. That is a great idea; we would be happy to have a meeting. I want to manage expectations. We are going to listen to all the evidence and a wide range of voices, but it would be helpful for those voices to come from inside this House as well as outside. I would be very pleased to do that.

[Viscount Younger of Leckie (Con)]

My Lords, it is anticipated that there will be a chilling factor, with businesses thinking twice about hiring mothers-to-be and fathers-to-be if there are parental rights from day one. Is there not a danger that businesses will find ways of pre-emptively rejecting candidates whom they believe will be in a position to take parental leave immediately or soon after taking up their new roles?

[Baroness Sherlock (Lab)]

My Lords, leave from day one is about the ability to give notice. For statutory maternity and paternity pay, there is already a significant period of qualification of working for the employer. If the noble Viscount is seriously suggesting that businesses would reject all potential mothers and fathers, that is going to leave them with quite a small pool to choose from when they are selecting. The reality is that many businesses already recognise that there are genuine benefits to be had in enabling people to be productive. If people are worrying about what is happening at home, then they are not able to do that. However, we have to get the balance right, so the review will carefully weigh up the benefits for families against the impact on employers and the Exchequer before Ministers decide on any reforms. On that point he is absolutely right.

[Lord Fox (LD)]

My Lords, in order for us to plan our workflow over the next couple of years, can the Minister let us know how many other consultations are still under way and how many more reviews will be conducted before the Employment Rights Bill is enacted?

[Baroness Sherlock (Lab)]

My Lords, the Government will consult with employers and those who are going to be affected to make sure that the implementation of the decisions Parliament has already made is done appropriately. I make no apologies for that, and the House should welcome it.

[Baroness Penn (Con)]

My Lords, the Minister talked about the evidence needed. When Quebec introduced five weeks of paid paternity leave 20 years ago, not only did it increase the take-up and length of leave taken by dads, but it increased mothers’ labour-market participation by around 7%. Does the Minister accept that, based on the information available to us today and for the last 20 years, six weeks of paid paternity leave is the single biggest policy the Government could implement to close the motherhood pay penalty? There is a good growth case for introducing it and we do not need another 12-month review to reach those conclusions.

[Baroness Sherlock (Lab)]

Despite discouragement from behind me, I am going to be gentle about this. The noble Baroness makes the important point that there is a lot out there to be learned. We are looking at the international evidence. In Great Britain we tend to be more generous with leave than, for example, other OECD nations, but we do not match up on pay. As part of the review, we have been looking at international comparisons to see what happens, recognising that there are of course differences in labour markets and tax regimes. We must be aware of the impact on our particular context. Certainly, I am hearing a lot of clear voices calling for fathers to have more paternity leave. One of the things we need to be aware of is that when shared parental leave was previously introduced, take-up was very low indeed. We need to make sure the system works well, rather than just diving into making changes.

[Lord Watts (Lab)]

Does the Minister agree with me that there is no future for Britain unless it gets out this situation of low skills, low pay, poverty wages and poor conditions, with some of the worst employment and pay rates in Europe?

[Baroness Sherlock (Lab)]

My Lords, I think the noble Lord has been listening to my colleague and noble friend Lady Smith of Malvern. This Government are committed to driving up skills as a way of driving out the growth in unemployment in this country. We must invest in the skills that are out there, making sure our young people get skills, that people have the chance to re-skill, and that we give employers the skills they need. Through our industrial strategy, we are looking at some of the key growth areas, making sure we understand what will drive them, what they need in future staff, and how we invest in them. Better-skilled jobs are good for the economy and good for families. That is the way forward.

[Lord Hunt of Wirral (Con)]

My Lords, when we dealt with the Employment Rights Bill, just before Royal Assent there was a draft implementation plan, which the noble Lord, Lord Fox, referred to. We were promised that the Government would publish a new, revised implementation plan on or around Royal Assent, but we are still waiting. When is it going to come?

[Baroness Sherlock (Lab)]

My Lords, I have no idea. I will find out what is happening and, if there is anything out there, I am happy to write to the noble Lord with it. However, I tell him this: we had lots of long battles in this House over the Employment Rights Bill but it is now an Act, and it is surely now time for all of us to make sure that we engage well, listen to employers and take the time to get this right for the benefit of staff and employers everywhere, and of the country.