Under the Employment Relations Bill going through Parliament, parental leave would be unpaid. But ministers may make a U-turn after being warned that many low-paid mothers and fathers could not afford to take advantage of the scheme. The Government may help poor families to take parental leave by extending the Working Families Tax Credit, which boosts the incomes of low-paid families in work.
In the long run, some of Tony Blair's advisers want to bolster his appeal to Middle England by introducing paid leave for all workers, whatever their earnings. But this could cost up to pounds 2.5bn, and ministers are expected to concentrate help on the low paid.
A campaign to win paid family leave has been launched from the Labour back benches by Harriet Harman, who was sacked as Social Security Secretary by Mr Blair last summer.
She has studied the operation of parental leave in the United States, where she found strong evidence that low- income groups were reluctant to take it up.
"Even if parental leave is not paid, it's still a big step forward. But paying it would ensure that it would work fairly and that no one would be prevented from taking leave because they couldn't afford it," Ms Harman said yesterday.
She warned that, unless the leave was paid, a single mother taking time off would rely on income support and would be unlikely to return to work since she would be better off on benefits. It would be cheaper and better for the Government to pay her wages during her leave.
The former minister does not believe the Government should pay for the well-off to take leave, saying its help should be concentrated on low- income and middle-income groups.
When the pounds 5bn-a-year Working Families Tax Credit is introduced in October, top-up payments will be based on a "snapshot" of income just before workers apply for them. If they then take parental leave, their payments will not be uprated to take account of their lost wages.
Ms Harman wants the Government to extend the scheme by creating a "parental leave tax credit", which, she estimates, would add only pounds 28m to the annual cost.
Her campaign was boosted on Saturday when Cherie Blair told the Woman Lawyer Forum in London that employers should pay for fathers to take time off work when their children are born.
"We need to encourage men to take parental leave and to do that we have to show it is valued and one way to do that is to make it paid," the Prime Minister's wife said.
However, ministers are expected to reject the idea of forcing employers to foot the bill. They are reluctant to add to the burdens on businesses, which are already complaining about the impact of legislation introduced since Labour came to power.Reuse content