HC Deb 08 February 1983 vol 36 cc966-73

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Major.]

9.26 pm
Miss Joan Lestor (Eton and Slough)

In the 15 months or so since I held the position of Opposition spokesperson on women's rights and welfare, I have received a large number of letters from women and from organisations concerned with women's rights. By far the largest part of my postbag has been concerned with the issue of maternity benefits, mainly because of the complexity involved in making claims and the regulations surrounding those who are entitled to the benefits. Several months ago, the Equal Opportunities Commission conducted a detailed survey of maternity provision in the United Kingdom. It found: Britain is almost alone in continuing to regard the existence of maternity rights as a matter of debate; in most industrial nations the concern is to extend the existing provision. I wish to try to draw to the attention of the Minister some of the difficulties that have been raised in the hope that he will perhaps examine them. British women, by any standards, are badly done by in respect of maternity benefits. Our maternity grant is almost at the bottom of the league in the industrialised world. United Kingdom women are subjected to a complicated claims procedure for entitlement to maternity pay and leave. A Policy Studies Institute report in 1980 revealed that just over half of all working women covered in its survey satisfied the provisions entitling them to maternity pay and leave. In other words, it may be the case that because of the manner in which our maternity legislation is structured, up to half of all working women are denied key entitlements and have no fallback other than a rigidly structured maternity allowance and a woefully inadequate maternity grant. For example, a woman who works one day after 1l weeks before the confinement loses her claim to the allowance.

Anyone doubting the ineffectiveness of maternity provision in the United Kingdom might have his attention drawn to a survey carried out by One-Parent Families. This has provided a great deal of information on the subject, and has shown that 25 per cent. of the most vulnerable pregnant women were receiving no help at a time of severe financial difficulty. This resulted in inadequate diet and lack of basic items for the baby. These were recurrent features of those women's experiences.

Maternity provision is riddled with complexities and could not possibly be covered in a debate as short as this. However, there are two problems of overriding concern that the Government might want to examine, and perhaps return to and comment upon later.

Maternity legislation is governed by a two-year rule. It is to this rule that most objections have been raised. A women is not entitled to maternity leave and maternity pay unless she has been with the same employer for two years, and in some cases for five years. We are the only European country that imposes such a restrictive period of qualifying service. In all but one other EC country the production of a medical certificate is sufficient for entitlement to maternity rights.

There can be no justification for a system such as ours whereby a woman who may have been working for twice the qualifying period—say four years—but who may change her job 12 months before she becomes pregnant, perhaps because she wishes to improve her job prospects by changing employers, is then denied maternity pay and maternity leave.

For such women, the two-year rule is a disincentive to pursue their careers. A woman may have been working for twice the qualifying period but may have to change jobs, sometimes—this was one of the examples brought out in the surveys—because her husband had done what he had been encouraged to do, got on his bicycle and found work elsewhere. As a result, the woman has to renounce her claim to maternity benefit if she is to follow him and live with him in his new place of employment.

Mrs. Ann Taylor (Bolton, West)

Is it not strange that if the husband in those circumstances were to fall ill and have to claim sickness benefit his entitlement to sickness benefit would not go on his record with the current employer, but on the credits built up over the years in employment?

Miss Lestor

That is a valid point that I was not going to make, so I am glad that my hon. Friend has made it.

A woman who, because of the lack of adequate child care provision, may have to give up work from time to time because of school holidays or when a child is ill, is denied maternity rights because she has broken her employment. A woman who is educated late in life, perhaps in her late 20s which is not unusual, and who wishes to have a family fairly quickly, is forced to wait for two years to qualify for the benefit.

Even worse, a woman who works part time will need to work for five years for the same employer before she can secure her claim to the job and have a child. It must be seen that this two-year rule is one of the biggest encumbrances and one of the most unfair rules that can apply. Although I know what some of the arguments were for the rule, looking at the Department of Employment survey on the difficulties of small firms over maternity rights and maternity leave, one sees that the Department could find no evidence to substantiate the claim that the firms were experiencing any difficulty.

Even for those women who have served their period of qualifying service, a whole new set of hurdles has to be climbed over. Unless a pregnant woman goes through a complicated procedure, made worse by the Employment Act 1980, of submitting a series of written notifications before and after the birth and producing the right certificates to the right people at the right time, she will find that all her maternity entitlement will be lost. She will be without maternity pay and in danger of not getting her job back. She will be at the mercy of her employer who may or may not decide to take her back.

A chairman of the employment appeal tribunal has recently described our maternity legislation as of inordinate complexity exceeding the worst excesses of a taxing statute which is especially regrettable bearing in mind that they are regulating the everyday rights of employers and employees. In my view, and in the view of the organisations that I have mentioned, this complicated procedure needs to be overhauled and streamlined, especially when we bear in mind the few women who are returning to work.

To what do the majority of pregnant women have access? They have a maternity allowance which is no longer earnings-related because of the Government's decision to abolish ERS. That which has been saved from its abolition might have been used to top up the grant. The allowance is available only to women who have been paying the required level of national insurance contributions. Women who have not paid the required level of contributions but who qualify for maternity pay can have the allowance deducted from their pay notwithstanding the fact that they are not necessarily entitled to it. As ERS has been abolished, it is important for maternity pay to be paid at 100 per cent. again rather than at 90 per cent. It was paid at 90 per cent. because ERS resulted in it being topped up. This means that there has been a loss for all women. Women take a cut in pay to have a baby and the maternity pay fund is making money because of the abolition of ERS.

The only certain form of income for some pregnant women is the maternity grant. Women who have not been in employment, or who have been in irregular, low-paid jobs where they have not paid many national insurance contributions, have access to only one form of financial assistance at a costly and stressful time. They have access only to the £25 maternity grant.

I welcome the Government's decision to extend the maternity grant to all women. That is to be welcomed but the grant remains at the 1969 level. I am sure that my hon. Friend the Member for Bolton, West (Mrs. Taylor) will agree that £25 would not buy even two dozen terry napkins for a new baby. The grant is not really adequate in 1983.

The United Kingdom is second from the bottom of the league table of EC maternity grants. In France, for example, women can receive over £1,000 or 41 times as much as British women. The figures produced for the maternity allowance show that the United Kingdom is almost at the bottom of the league table of all countries in the industrialised world. In a relatively poor country such as Portugal many women will receive a grant that is three times that which the women in the United Kingdom receive. So by any standards women in the United Kingdom are badly done by when it comes to maternity provision.

The Government have said that it would cost £72 million to re-establish the grant at its 1969 level, which would mean that it would have to be about £120. However, money has been saved by the abolition of ERS. Future taxation of the allowance could save up to £50 million. Money is available. Money has been saved which could reasonably be redistributed in the interests of women who are, in the majority of cases, denied access to benefits and other income at a time when they need it most. This often affects women who are already disadvantaged for various other reasons.

We should extend maternity pay to all working women so that they can make a contribution towards providing a better standard of living for their children. That surely cannot be a bad thing for any Government to want to do. If the maternity grant were increased as I have suggested, the Government would begin to be seen to be acknowledging the vital contribution made by women who are bringing children into the world.

In conclusion, the two-year rule should be abolished. It should no longer be applicable in these times. The Complexities surrounding how women claim and do not claim and who is entitled and who is not should be resolved. The evidence suggests that many of the women in greatest need at a time of childbearing are the very women who are denied access to benefits.

9.40 pm
Mrs. Ann Taylor (Bolton, West)

I wish to support my hon. Friend the Member for Eton and Slough (Miss Lestor) in her pressing of the need for better maternity provision for women. I did not intend to intervene in the debate and, had it not begun so early, I, like many other hon. Members, might have missed what my hon. Friend was saying. But as we have a little time it is important to emphasise some of the facts that have been mentioned.

It is undoubtedly the case, as my hon. Friend has said, that at a time of stress as well as joy many women encounter the added anxiety of financial difficulty. They should be removed from all such worries. When a child is born a woman's mind should be on things other than financial circumstances and whether she is able to bring the child into the world without facing financial hardship. My hon. Friend rightly pointed out that the position for many women has become worse over the past few years. The most vulnerable women have probably suffered worse at the hands of the Government during that period.

My hon. Friend has referred to the changes that have taken place because of the employment protection legislation. Women at work face added complexities when they wish to make a claim for maternity leave or wish to return to work after a phase away from employment. The position of women in work has undoubtedly deteriorated because of the legislation. Women in part-time employment have suffered most. Five years in one place of employment is a considerable length of time for women who, in these days, find it difficult to get a secure job, especially a secure part-time job. Very often these are women who may have one child, who may wish or need to work on a part-time basis but whose entitlement to help at the time of pregnancy with a second child would be greatly reduced because she will not have been able to build up the entitlement to maternity pay or maternity leave. Women in part-time employment suffer worse than women in full-time employment.

The people who suffer most are those who receive no benefit whatsoever. My hon. Friend placed particular emphasis on that group. My hon. Friend quoted figures which showed that 25 per cent. of the most vulnerable women in our society have no entitlement to maternity benefits other than the basic maternity grant. She pointed out that the basic maternity grant will provide very little by way of necessities for a small child, especially a first child. My hon. Friend is right to press for an immediate increase in the maternity grant. She said that it would cost £72 million to raise the maternity grant to the 1969 level which, in today's figures, would be £120. Even £120 would not provide all the necessities for a first child.

I ask my hon. Friend and the Minister to consider whether we ought not to differentiate between the level of maternity grant for a first child and the level of grant for a subsequent child. The first child requires most expense because of the need to acquire basic necessities such as a pram, a cot and so on. I hope the Minister will bear that point in mind and if he feels unable to announce a general increase in maternity grants, perhaps he will consider the point that there should be this differentiation.

It is important to remember that this money will not only help the mother. It will undoubtedly help the child as well. If a mother is worried about her financial situation or if she cannot afford the nutrition that she needs during pregnancy, the health of the child will suffer in the long term. This is not a selfish plea for more financial assistance to mothers, but a matter of the health and welfare of babies. Good nutrition in pregnancy is an investment in healthy children. Better maternity provisions generally would help women to have healthier babies, which in the long term will benefit the country as a whole and not just the families concerned.

9.45 pm
The Under-Secretary of State for Health and Social Security (Mr. Tony Newton)

I thank the hon. Members for Eton and Slough (Miss Lestor) and Bolton, West (Mrs. Taylor) for raising and contributing to this debate on a subject of undoubted importance to us all, but especially to women affected by the problems of maternity pay and provision.

Although the existing provisions have already been described, it may help those present and those who may later read the report of the debate in Hansard if I begin by setting out as clearly as I can the help already available to women who are expecting babies.

First, as the House is well aware, almost all mothers receive the basic maternity grant of £25. Like previous Administrations, we have felt unable to give the priority to increasing that grant that has been called for today. We have, however, made some progress by turning a contributory benefit, which excluded quite a large number of women, into a non-contributory benefit with effect from last July. In some respects, that is a modest change as no-one could pretend that £25 is a large sum. Nevertheless, the grant is now available to 60,000 more mothers each year than was previously the case. Total maternity grant payments are estimated at about 700,000 per year compared with nearer 600,000 before the change. The cover has been extended by about 10 per cent., so we can at least be pleased about that.

The second element in maternity provision is the maternity allowance administered by the Department of Health and Social Security. This is usually £25 per week, unless there was some deficiency in the woman's contribution record when she stopped work because of pregnancy. As the hon. Member for Eton and Slough acknowledged, that allowance is paid for 11 weeks before the baby is due and continues for 18 weeks, although it may be extended if the baby is late. To receive the allowance, the woman must refrain from work and satisfy contribution conditions. It is thus available to women who have been in employment within a year or so of becoming pregnant. Eligibility depends to some extent on the timing. I accept that there may be complications in this respect as there are in relation to other national insurance benefits, due to the contributory principle.

Thirdly, entitlement to maternity pay from the employer arises if the woman has worked for the firm for at least two years. It is calculated at 90 per cent. of weekly earnings, less the standard maternity allowance, and is paid for the first six weeks of absence after the eleventh week before the baby is due. The Department of Employment reimburses the employer with a payment from the maternity pay fund.—[HON. MEMBERS: "Read it."]—I have more remarks to make on the main point without reading the notes that I receive from my hon. Friends, pleasing though it is to have so much attention from the Whips. In view of my previous experience, I have much fellow feeling for them in the position in which they have been placed in the past few minutes.

I have discussed the three main elements of provision for maternity in this country. I shall touch on a subject that nobody has mentioned and that should be taken into account in the argument—the extent to which help is available to many of the poorest members of our community. It has been implied that they do not get sufficient help through the operation of the supplementary benefit system. Under that scheme, single payments are available to pregnant women and to those who have recently given birth to or have adopted a baby if they are on supplementary benefit. That help covers such items as baby clothes, cot bedding, cots and prams.

In 1981, the last year for which figures are available, the Government spent £2.5 million on single payments for maternity needs to 61,000 people. The average payment was £43.50. I do not wish to exaggerate that figure, but 61,000 is substantial, and £43.50, as the average single payment of supplementary benefit, is more than the help that they would have received from the maternity grant. It puts a different perspecitive on some of the remarks that the two hon. Ladies made about the absence of help for the least well off in our community.

The hon. Member for Eton and Slough mentioned the value of the grant. There is no gainsaying the fact that it has been losing purchasing power since it was increased to £25 in 1969. The date shows that it is not only under the present Government that that has happened. To have the same purchasing power as in 1969 the grant would have to be set at just under £120, which is the figure advocated by Maternity Alliance.

The Government have taken the view, as have successive Governments of both major parties since 1969, that while resources are scarce we should concentrate on maintaining the value of the continuing weekly benefits intended to cover day-to-day living expenses. To increase the grant to £120 would cost £65 million a year, in our estimation, not the £72 million that the hon. Lady mentioned. We must recognise that a large proportion of that money would go not to those who are most in need, whose cause was pleaded by the two hon. Ladies, but to everyone regardless of need.

Several suggestions have been put forward as to how an increase might be financed. Both hon. Ladies referred to the savings that the Government made by ending the earnings-related supplement. As I have said on other occasions in the House in debates about other benefits, the decision to abolish the earnings-related supplement, which was not easy or popular, was designed to reduce Government expenditure on social security as a whole in a way that would cause less hardship than other savings that might otherwise have had to be made. Against that background, it would be unrealistic and unreasonable for me to suggest, and even more foolish for me to accept, that that money could be available for spending in some other way. That would miss the point of the exercise when it was undertaken.

Both hon. Ladies and other hon. Members must face the fact that, although £65 million is not, in the sweep of Government spending, an unbelievably large sum, it is significant, and any Government must consider it against the background of other things on which the money could be spent. For example, it is about the same amount as would be required to restore the abatement of unemployment benefit, which has caused considerable controversy and anxiety. It would put a little more than 10p on the weekly child benefit, which is again something that the House would be pleased to see.

The Guardian this morning published an interesting letter from the hon. Member for Eton and Slough pleading for the extension of the invalid care allowance to married women. That £65 million is almost exactly the sum that would be required to extend that allowance. I do not wish to embarrass the hon. Lady, but if the £65 million—and no more—were available, would she spend it on the scheme mentioned in her letter in The Guardian this morning or on what she discussed in her speech tonight? If she were standing at this Dispatch Box instead of at the Opposition Dispatch Box, she would have to make the choice.

The Maternity Alliance figures have been mentioned several times. The alliance's table—I assume that I have the same table as the hon. Lady—purports to show that Britain is in the position that she described in relation to other European and Western industrialised countries. I cannot deny that the table shows the United Kingdom in an unhappy position in the league, but it does not include Italy or Holland, neither of which pays any grant. Holland's weekly provision is little more generous than that of the United Kingdom, but that country is not regarded as backward in providing social security. I do not place too much on that fact, but it is an illustration of the difficulties and dangers of international comparisons. Although there has been reference to the payments of more than £1,000 for a third child in France—

Mr. Dennis Skinner (Bolsover)

He is filibustering.

Mr. Newton

—that sum is paid for triplets, not for the third child, as the alliance suggests.

The Maternity Alliance report says that the maternity allowance is to be taxed in 1983. That is not so. Although it remains our intention to bring the benefit into tax at some stage, no date has been fixed.

The hon. Member for Eton and Slough made many comparisons between grants paid abroad and those paid here. However, those comparisons are not as clear-cut as is sometimes suggested. One must take into account other factors that are essentially important to Britain, such as the availability of free medical and dental care and other services and goods for mother and baby.

The hon. Lady mentioned the complexity of the system and some of the rules that govern it. She knows that the main reason for including a qualifying period as high as two years for maternity pay was to limit the cost to employers. Although they are entitled to claim rebates from the maternity pay fund, that is built up from part of their national insurance contributions. In present circumstances, we must take that into account.

When we consider these matters, we must consider the possibility that changes in the terms and conditions on which women can obtain maternity pay might lead some employers to wonder whether they should employ women who are likely to have babies. If there is any risk that, by improving maternity pay, one produces circumstances in which it is much more difficult for young women to get jobs, one may not have improved matters overall.

It being Ten o'clock, the Motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Major.]

Mr. Newton

There is another point that concerns the two-year qualifying period with regard to part-time workers. It is important to recognise that the two-year qualifying period applies to anyone who works more than 16 hours a week. That includes those whom most people would define as part-time workers. The five-year qualifying period applies only to those part-time workers who work between eight and 16 hours a week. It is important to put that on the record.

The other major criticism was that maternity pay has been set at 90 per cent., rather than 100 per cent., of earnings since the end of the earnings-related supplement. The hon. Lady knows that the Government have stated that they intend to make it 100 per cent. again as soon as the economy allows them to do so. The order-making power to raise the level is in section 2 of the Social Security Act 1981. Our intentions remain as they were expressed then.

I am aware that the hon. Lady will think that I have been unable to move far to meet some of her principal points. Perhaps it is most constructive for me to recognise that both hon. Ladies asked me not to respond immediately, but to consider the matter in the context of longer-term maternity provision. They both know that I should like to rationalise the system and that in 1980 we published a consultative document that set out the options for possible change and, we thought, improvement. It was intended to discover whether there was a desire for a change of direction that would allow a redistribution of resources between mothers who qualify for benefits.

As we were constrained by economic circumstances, we had to consider only proposals that involved no additional expenditure. The hon. Ladies will know that the result of that consultation was that we found no consensus in favour of altering the distribution of benefits, so we concluded that no radical changes could be made in the provision for the time being.

The Social Services Select Committee and others have responded to the consultative document with several recommendations. My right hon. Friend the Secretary of State for Industry made it clear that the right time to reconsider maternity benefits would probably occur when we had some experience of the statutory sick pay scheme and the working of the non-contributory maternity grant. I am happy to tell the hon. Ladies that we intend to review financial provisions for maternity benefit. Work on that should start next year, by which time the statutory sick pay scheme will have been in operation for some time and the non-contributory maternity grant will have been in operation for two years. Decisions about the nature and scope of the review will be taken nearer the time. The hon. Ladies may regard that as a small crumb, but I hope that they will be glad to have it placed firmly on the record as a commitment and an intention. When we mount the review, account will be taken of the constructive suggestions that they have made in the debate.