Source · Select Committees · Women and Equalities Committee
Recommendation 3
3
Acknowledged
Introduce phased increases to statutory parental pay, reaching 80% of average earnings
Recommendation
In the longer term, the Government must also consider a feasible approach to phased introduction of increases to statutory pay across the system, to bring rates for all working parents up to a very substantial proportion (80% or more) of average earnings or the real Living Wage. Overall paid maternity entitlements in the UK compare unfavourably with most developed countries; reform of statutory pay must therefore not include any diminution of existing maternity entitlements. (Recommendation, Paragraph 32) Extending paternity leave
Government response summary AI-generated
The government acknowledges the recommendation to increase statutory pay but defers it to the ongoing parental leave and pay review, stating the review will consider how the system can promote economic growth and improve women's labour market outcomes.
Summary of the government's response below — read the verbatim text to verify.
Government Response
Acknowledged
HM Government · verbatim extract
Acknowledged
The government understands the importance of both parents being able to take time away from work to care for their new baby. We recognise the parental leave and pay system can do more to better support working families, in particular to enable balanced childcare choices that work for different families and promote gender equality in parenting. Currently, Statutory Paternity Pay is paid at the statutory rate of pay (£187.18 a week 25/26) or 90% of their income, whichever is lower. The government understands the importance of ensuring statutory pay is set at the right level. The Secretary of State for Work and Pensions is required by law to undertake an annual review of benefits and State Pensions, including statutory pay. This is based on a review of trends in prices and earnings growth in the preceding year. From April 2025, the statutory rate of pay was uprated in line with the September 2024 Consumer Price Index of 1.7 per cent, with the standard rates increasing from £184.03 to £187.18 per week. This means that statutory pay for parents retains its value against inflation. When considering calls to increase the level of parental entitlements, the Government must balance a range of factors including the needs of parents, the impact on employers, and affordability for taxpayers. As you recognised in your report, significant increases to the statutory rate of pay would mean a large increase to government spending and we must consider how to balance this. The government recognises that the parental leave system can do more to support working families and gender equality in parenting, which is why we launched a review of the parental leave and pay system on 1 July. All parental leave and pay entitlements will be in scope, including statutory maternity and paternity leave and pay. The review’s published terms of reference propose objectives for the parental leave and pay system, including improving both women’s labour market outcomes and reducing the gender pay gap, and ‘motherhood penalty’. We expect the review to run for a period of 18 months, and it will conclude with a set of findings and a roadmap, including next steps for taking any potential action.
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