Professional body, the Chartered Institute of Personnel and Development (CIPD) offer a cautious welcome to the Government’s proposal to extend paid maternity leave from six to nine months by 2007 while warning that rising wage pressure could trigger higher interest rates upsetting Brown’s plans for economic growth.
Mike Emmott, CIPD Employee Relations Adviser said:
“Research suggests that giving employees more choice about their working patterns pays off in terms of commitment and performance. Increasing the length of time that mothers can spend at home before returning to work makes sense as part of a wider strategy to improve childcare.
“However, it is sensible for the Government not to move too fast, but to evaluate what impact the change has on women’s careers and job commitments before considering going further in this direction. It may provide mothers with the opportunity to spend more time with their children early on but it could also cause them to drift away from the labour market.”
Reservations also extend to plans to transfer the leave allowance between mums and dads. The CIPD warn that the rule could cause confusion and leave businesses with the extra burden of managing the logistics. It is also unclear they say, how many mothers will wish to surrender maternity leave to fathers, who can also claim two weeks paid paternity leave.
On the proposal to extend the existing right for parents of younger children to request flexible working to those with older children, Emmott says this is a missed opportunity.
“The Government needs to look at the bigger picture and ensure there is help in place for other groups such as those responsible for elder care. We continue to urge the Government to extend the right to all employees, which most employers already do in practice on a voluntary basis.”
A recent CIPD survey, reveals that 91% of employers are prepared to consider requests for flexible working from employees who are not entitled to the right, while 72% say they are prepared to accept requests from all staff.
CIPD Chief Economist, John Philpott puts Treasury assumptions about the degree of spare capacity in the economy in the spotlight.
“The Treasury assumes that there is ample scope to raise hours of work, boost hourly productivity and increase employment in 2005, thereby enabling the economy to grow by 3-3.5% without consumer price inflation rising above the target rate. This is highly debatable.
“The employment assumption looks particularly rosy given the tightness of the labour market and widespread evidence that employers are finding it extremely difficult to fill job vacancies at all skill levels. The Chancellor’s measures on training for workers and jobless people, plus extra help to get more lone parents and people on Incapacity Benefit back to work seem to recognise this. But most of these measures will be not be implemented until well into the next Parliament.”
Philpott warns that ‘squeezing’ additional output from the existing workforce could prove a challenge:
“Even if Brown is proved right about the demand side of the economy his hopes for 3-3.5% growth next year could be scuppered by rising wage pressure which would trigger higher interest rates. Ironically, a Pre-Budget report strong on measures to improve the underlying long-term strength of the UK economy seems to seriously understate the extent of short-run supply side constraints.”