EU maternity leave plans rejected

The Government has welcomed moves to shelve EU maternity leave plans which would have cost the Treasury an extra £2.5 billion a year.

EU ministers meeting in Luxembourg decided by a majority to ditch proposals to extend minimum maternity leave to 20 weeks on full pay.

For months the UK has warned the extension, pushed by MEPs, would cost too much and might prejudice the employment of women.

Current EU rules, agreed in 1992, set minimum maternity leave at 14 weeks, with pay for the duration to be no lower than sickness pay in the member state concerned.

The European Commission decided in 2008 to increase the benefit, proposing 18 weeks' maternity leave, with the exact pay rate left to national authorities.

In October last year MEPs went even further, guaranteeing a tussle not just with the UK but with other member states with relatively generous national schemes, such as Germany, Belgium and Spain.

Current UK rules give pregnant women up to a full year off, six weeks of it paid at 90% of the mother's average pay, followed by 33 weeks on Statutory Maternity Pay (SMP) of £124.88 per week - 55% higher than sick pay. The rest is unpaid.

This afternoon employment minister Chris Grayling said: "There is a clear view across a majority of member states that we simply cannot afford the EU's proposals, and that in any case these are matters that should be dealt with by national governments. I very much hope that the Commission will now drop this plan."

Employment relations minister Ed Davey added: "This is a good result. The fact that so many other member states have echoed our worries sends a clear message that this one-size-fits-all measure is not in the best interests for Europe and certainly not in the best interests for the UK."

The Federation of Small Businesses also welcomed the decision.

Chairman John Walker said: "Extending maternity leave to 20 weeks could have cost small firms £7,000.

"We all know it is important to have adequate, flexible maternity and paternity leave but these proposals would add new payroll costs for overburdened businesses. We should be making it easier for people to gain employment, not placing obstacles in their way, and this is the right step forward."

Pressure is now on the European Commission to drop the updated maternity plans entirely, with the Institute of Directors warning that 20 weeks of maternity pay at 100% of earnings would be unaffordable.

But Commission officials signalled they would be now be looking for a compromise plan to present to ministers later this year.