In spite of opposition from some employers, an extra 250,000 women a year will receive higher payments compared with the 100,000 who qualify under current rules. Women will also have greater flexibility over when to begin their maternity leave under the scheme, contained in the Directive on the Protection of Pregnant Women at Work.
The changes set out in a Department of Social Security consultation document yesterday provoked anger from business leaders, who attacked the Government's decision that employers should fund the additional costs - up to pounds 65m - involved.
The paper conceded that small employers might need special help but Peter Lilley, Secretary of State for Social Security, said: 'It would not be right to pass on the amount to the general taxpayer, who already meets the existing cost of statutory maternity pay.' The Institute of Directors said businesses were being 'lumbered with what was essentially a social cost' flowing from the EC Social Charter.
The measures are among those least likely to appeal to many Government supporters and right-wing MPs. But women are guaranteed the rights which the Government accepted in 1991 - before Britain's Maastricht opt-out on the Social Chapter - and is legally obliged to enact in full no later than October 1994.
The directive lays down a right for women to return to their jobs after at least 14 weeks' maternity leave without needing a minimum period of continuous service. The minimum payment during the 14 weeks must at least equal the state benefit payable for sickness absence - which means the current 'lower rate' statutory maternity pay (SMP) must be increased.
In addition, more of the existing enhanced 'higher rate' SMP will have to be paid out because women will qualify for it after working for their employers for 37 weeks instead of two years. About 70,000 to 80,000 women are expected to benefit from that change. It is these additional costs, averaging about pounds 290 per worker, Mr Lilley believes employers should pay.
Ann Robinson, the institute's head of policy, said: 'These proposals could hurt the people they are intended to help. The extra cost involved in employing women of childbearing age could handicap their employment prospects.' But Dr Marjorie Mowlam, Labour spokeswoman on women's issues, said: 'This is a minimalist approach proposed by a mean-minded Government. Under both options put forward in the consultative document one in five women will continue to have no rights whatsoever to statutory maternity pay.'