Parental leave payments of as much as £150 a week will be a feature of Labour's manifesto for the next general election.
The plans, submitted to the Department of Trade and Industry as part of a review of measures to help working parents, have been welcomed by Stephen Byers, the Secretary of State for Trade and Industry. They could result in payments for up to 13 weeks for both mothers and fathers, at a total cost of about £525m a year.
Details of the research for the project, carried out by the Labour MP Ruth Kelly (Bolton West), will be published in a Fabian pamphlet next month. However, they have already been submitted to Mr Byers'review.
Ms Kelly used a poll of 729 parents to calculate the likely take-up of the scheme, and asked the accountancy firm KPMG to carry out costings. The poll found that 97 per cent of parents would be "very interested" or "interested" in a paid scheme. The MP said yesterday that only 2 per cent offathers were expected to take advantage of the existing unpaid leave scheme. Although the cost of the proposed programme would be substantial, the family should, she said, be made a priority.
Ms Kelly said: "If you compare it with the cost of taking a penny off the basic rate of income tax, that would cost £2bn. It is a fairly significant sum but I do think the family is a priority area for the Government."
While people in higher income groups would be less attracted to the scheme because the £150 would not cover their outgoings, people with lower incomes would benefit more.
If the Government's offer was dropped to £75 a week, parents would take 1.5 weeks' leave on average, she found, while at £150 per week the average would be 5.1 weeks.
Mr Byers described the proposals as "a significant piece of work which will inform our consideration of this important area". However, sources said the plans would play a big part in discussions about the general election manifesto.
Earlier research on the subject was endorsed last year by the House of Commons Social Security Committee, which recommended the introduction of a flat-rate payment. The Government will come under pressure from the CBI to reject the proposals, which says 72 per cent of businesses are "very worried" about parental leave.
Meanwhile, new help for parents working in Parliament was at hand last night as the Employment minister, Margaret Hodge, set up a seven-strong committee to look into proposals to make the House of Commons more child-friendly.
The team will also consider the question of maternity leave for MPs. Earlier this month the Speaker, Betty Boothroyd, ruled that breast feeding would be barred in most parts of the Palace of Westminster.Reuse content