Labour: Paternity leave reforms would help 400,000 families

Mumsnet has spoken out in support of Labour proposals to increase paternity leave and boost paternity pay.

Chief executive Justine Roberts told ITV News that extending paternity leave could have the "long term economic benefit" of keeping mothers from leaving the workplace by helping share the responsibility of parenthood.

The Federation of Small Businesses has urged the government to allow companies to adapt to shared parental leave before making more changes.

Responding to Labour proposals to extend paternity leave and increase paternity pay, Federation chairman John Allan warned that small firms would struggle to shoulder the extra financial burden.

The Labour Party has announced plans to extend paternity leave for new fathers - increasing the time allowed off to a month, and upping pay to meet minimum wage.

Party leader Ed Miliband says the move would support families - but business leaders have warned it could put unnecessary strain on small companies.

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Business leaders have hit back at Labour Party proposals to increase paternity leave to a month, saying it amounts to a "tax on business".

Ed Miliband announced today that, if they come to power after the general election in May, the party would not only increase time amount of time available but would increase the minimum pay.

But John Longworth, director general of the British Chambers of Commerce, said small and medium-sized businesses were likely to struggle under such laws.

Labour leader Ed Miliband has said it would fund a planned increase in paternity pay through saving tax credits by extending free childcare to three- and four-year-olds.

The opposition leader met with families to launch what he called 'Father's Month' - a bid to highlight family-friendly policies ahead of the general election in May.

And he said that extending free childcare - paid for by a bank levy - would save "significantly" more in tax credits than the cost of the extra paternity pay, which is estimated to potentially cost the Treasury £150 million a year.

Labour said adopting reforms to boost paternity leave for fathers, 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.