Ed Miliband Riles Business With 'Father's Month' Paternity Leave Plan

Ed Miliband has unveiled plans for a significant boost to paternity leave if he wins the election - doubling the time fathers can take off to four weeks in what Labour is dubbing a "Father's Month".

The proposal, which adds more than £100 a week in paternity pay to match the minimum wage, has already drawn the wrath of the British Chambers of Commerce, which labelled it a "tax on business".

This comes after Miliband spent last week under seemingly continuous fire from business leaders, with various critics warning that his "business bashing' would be a "catastrophe" for the country.

The Labour leader's new proposal is expected to cost the taxpayer at least £150 million a year if it succeeds in raising take-up by around a quarter - a sum the Opposition says would be more than offset by savings in tax credits from extending free childcare.

"The Tories want to spend £700 million on what they call a married couple's allowance but which in fact will go to just one in five families with children," he said.

"Instead, at the heart of Labour's plan is the belief that Britain succeeds when modern working families succeed. That means giving dads, as well as mums, the chance to spend more time at home in those crucial weeks after babies have been born."

Labour said adopting the reforms, first put forward by the left-leaning IPPR think tank last year, would benefit up to 400,000 families a year.

Under existing rules new fathers qualify for a statutory £138.18 a week, equivalent to £3.45 an hour for a 40-hour week, with employers encouraged to make up the gap in the employee's usual pay.

Only just over half of new fathers (55%) take it up at present. Bringing the taxpayer-funded contribution up to minimum wage level would increase take-up to around 70%, the IPPR estimates, at a cost to the Treasury of around £150 million in 2015/16.

With the party's spending plans under close scrutiny ahead of the election, Labour said House of Commons figures showed its policy of extending free childcare to three and four-year-olds - paid for by a bank levy - would save "significantly" more in tax credits than the cost of the extra paternity pay.

"The modern British family needs government to be more flexible in what it does to help," Miliband said. "Thanks to the last Labour government, fathers have two weeks' paid paternity leave.

"Millions of families have benefited, with parents saying this has helped them support each other, share caring responsibilities and bond with their children. But the money isn't great - and too many dads don't take up their rights because they feel they have to go back to work so they can provide for their family."

What do the other parties stand on paternity leave?

Tories: The party supports greater flexbility for parental leave, arguing all future spending plans need to pass a "families test".

They also reportedly killed off their coalition partner's demands for a month of dedicated "daddy leave" instead of the current two weeks.

Tory cabinet ministers tried to water down the recent package of shared parental leave, wanting couples to give a binding commitment on how they would share the leave in advance, while the Lib Dems warned that this would defeat the point of flexibility.

Liberal Democrats: Nick Clegg's party promises to give fathers an extra four weeks paternity leave, which increase the protected paternity leave for dads to six weeks, on a "use it or lose it" basis.

"Extending paternity leave is an important next step to encouraging new dads to spend more time with their child in those vital early weeks and months after birth," said Lib Dem business minister Jo Swinson.

Elizabeth Duff, senior policy adviser at the National Childbirth Trust, said: "As well as the difference it will make for mums, the more that dads are able to engage with their baby in the early days the better their bond will be, so we want to see all political parties committing to policies like this that will give fathers more time with their new families."

However, John Longworth, director general of the British Chambers of Commerce, said: "Businesses have already had to absorb over half a dozen changes to parental leave in the last decade - with one, shared parental leave, not even fully in place yet. This constant instability raises costs for business and generates uncertainty when it comes to taking on new staff.

"It also raises the spectre of a dad being off for a month, returning to work for a couple of weeks, and then asking for shared parental leave as soon as he is eligible - which could be hugely disruptive to small and mid-sized firms whose success depends on the talents and contributions of each employee.

"Expansions of parental leave may win votes, but come at a real cost to business."

John Allan, chairman of the Federation of Small Businesses, added: "The reality is that for small businesses in particular, extending paternity leave from two to four weeks makes it much more likely that they will have to buy in replacement staff as they will struggle with absences. That's a cost that some firms will struggle to afford.”

Meanwhile, Nick Clegg will urge new parents on Tuesday to "embrace" the flexibility of the coalition's new shared leave arrangements, in which parents are able to split their time off in three separate blocks rather than taking it all at once.

"My challenge to you is to embrace change. Embrace shared parental leave. Embrace flexible working. Close the gender pay gap," he will say.

"We need to think big. We need to do things differently. But, as any successful entrepreneur knows, that is exactly what it takes to succeed."