Maternity Pay Boost Could Cost Firms £2bn

Fears are growing that new European Union plans to treble maternity pay could make it harder for women of child-bearing age to get jobs.

Following a vote by a European Parliament committee, businesses could be forced to pay new mothers full pay for 20 weeks - at an estimated cost of £2bn a year.

Currently pregnant women in the UK receive a full year off with six weeks paid at 90% of the mother's average pay, followed by 33 weeks on Statutory Maternity Pay (SMP) of £123 a week.

The rest is unpaid.

However, the burden of the cost of this increase in maternity pay will lie with the Government which reimburses businesses for the cost of SMP.

But now there are concerns that, if this law is passed, it could make it harder for small businesses to meet their payroll commitments and even put them off employing women of child-bearing age.

British Chambers of Commerce's Adam Marshall said: "This vote introduces complexity and uncertainty, which are totally unnecessary, as the UK and other EU countries already have well-developed national maternity pay systems.

"Companies need to be given the space to deliver growth and jobs, without being hamstrung by new and costly maternity rules."

UK Independence Party MEP Godfrey Bloom is also against the plans: "It is stupid because rather than increasing employment possibilities for young women, it makes them scarcer as hard-pressed businesses factor in the risk of losing staff - whilst paying them for months on end."

As the UK and other European countries struggle to recover from recession, MEPs and business leaders are concerned it could exacerbate the unemployment crisis.

However, the charity Working Families told Sky News it supports the planned law: "Evidence shows that finances dictate when low paid women return to work.

"Apart from the first six weeks, the UK pays women less than the national minimum wage in SMP.

"This sends a poor message about the best start in life for low income families."

Employment Relations Minister Lord Young said the Government has "concerns" and is lobbying to get the right deal for the UK.

Source Sky News