Author: lchinchen@tuc.org.uk

The UK ranks last in Europe when it comes to giving new parents well-paid leave following the birth of their child, according to a TUC analysis published today (Monday).

The analysis – published to coincide with the Children and Families Bill beginning its Committee Stage in the Lords today – says that in the UK new mothers get just six weeks of statutory maternity pay at 90 per cent of their wage. Across the Channel, the European average for well-paid leave for new mothers is 43 weeks.

Under the official European definition, ‘well-paid’ means someone getting at least two-thirds of their pre-maternity leave earnings, or a rate of pay greater than £840 (€1000) per month.

Mothers in Britain are also entitled to an additional 33 weeks pay but only at £136 per week – a rate which has fallen in real terms under this government. And in the UK only about one in four women receive extra occupational maternity pay from their employers.

Similarly the analysis says that there’s not much support available to new dads in the UK. Fathers only receive two weeks of paternity leave, plus the right to take additional paternity pay of up to 19 weeks, but all at only £136 per week. These entitlements are rarely topped up by employers, says the TUC.

In total the UK offers up to 41 weeks of paid leave to new parents, but this is the fifth lowest in Europe and less than half the European average of 89 weeks.

With such low rates of pay, barely one in three (29 per cent) new fathers in the UK are able to spend longer than two weeks at home following the birth of their child. This means that mothers end up taking the majority of leave, which can lead to a drop in their incomes and permanent damage to their career prospects, says the TUC.

The current lack of financial support for new parents is having a disproportionate effect on low-income families in the UK, says the TUC. Government figures show that better-paid fathers are 50 per cent more likely to take paternity leave than those on lower incomes.

As part of the Children and Families Bill, the government plans to introduce a system of shared parental leave from 2015 – but it will still be low-paid (£136 per week). Even on the government’s own estimates only between 2 – 8 per cent of new fathers will be able to afford to make use of it.

As the Bill comes under scrutiny during its House of Lords Committee stage, the TUC is calling on Peers to support an amendment to be debated today establishing six weeks of better-paid leave for fathers.

Since Norway introduced and then extended a fathers’ quota in the 1990s, the proportion of men taking some leave increased twenty-fold (from 4 per cent to 89 per cent). Key to its success has been pay set at 80 to 100 per cent of a father’s ordinary wage.

Commenting on the figures TUC General Secretary Frances O’Grady said:  “Unfortunately when it comes to supporting parents looking after a new baby, the UK is the scrooge of Europe.

“Countries across Europe are incredibly diverse, especially in the challenges they face, yet all of them have found ways to offer better support for new parents.

“A modest way to start turning this around would be for the government to give new fathers six weeks of well-paid leave.

“Without a properly-paid system of shared parental leave, women will continue to be forced to put their careers on hold as they continue to be the primary carers in their child’s all-important first year.”

Working Families Chief Executive Sarah Jackson said: “We know from callers to our helpline and from research that families are losing out. Many fathers can’t afford to take paternity leave as it is paid well below the national minimum wage.

“We’re supporting the introduction of a ‘father quota’ based on the international evidence of what works – independent leave for fathers, and paid at adequate wage replacement levels.

“We want to encourage more fathers to share the care but it sends a poor message about valuing family time if we offer less than the minimum wage to care for new born children.”

Chief Executive of the Fatherhood Institute Adrienne Burgess said: “In Iceland, reserving three months’ leave for fathers in the first year and paying this at a reasonable rate, has transformed the nature of parenting.

“Icelandic fathers now take more than a third of all the leave available to parents and Iceland now ranks first in the world for equality between men and women, according to the World Economic Forum.”

NOTES TO EDITORS:

Country	Number of months of well-paid leave	Total number of months of paid leave
Norway	35.4	35.4
Lithuania	24.9	24.9
Hungary	24.2	36.2
Czech Republic	24	36
Estonia	18.6	36.5
Sweden	13.4	16.4
Poland	12.5	48.5
Germany	12	24
Slovenia	11.7	14.2
Denmark	11.2	11.2
Finland	11.1	38.1
EU average	9.9	20.6
Iceland	9	9
Slovakia	6.5	36
Croatia	6	12
Greece	6	12
Ireland	6	6
Spain	5.1	5.1
Portugal	5	11
France	3.8	9.8
Belgium	3.7	35.7
Italy	3.7	13.7
Switzerland	3.2	3.2
Netherlands	2.8	14.8
Russia	2.3	18
Luxembourg	1.9	13.9
Austria	1.8	24
United Kingdom	1.4	9.5

Source: Adapted from the International Review of Leave Policies and Related Research (2013) Peter Moss (ed), Institute of Education University of London

NOTES TO EDITORS:

- The table includes the total amount of post-natal statutory leave (maternity, paternity, parental and childcare leave) available to a two-parent family.

- The definition of well-paid leave is taken from European Commission (2010) indicators for monitoring the employment guidelines.

- Where parents are entitled to different amounts of leave and pay the shorter periods have been used in this table.

-   Statutory pay in Slovakia is 65 per cent of earnings which has been considered to be well paid for the purposes of this comparison.

- The TUC’s campaign plan can be downloaded from www.tuc.org.uk/campaignplan

- All TUC press releases can be found at www.tuc.org.uk

- Follow the TUC on Twitter: @tucnews

Contacts:

Media enquiries:
Elly Gibson   M: 07900 910624     E: egibson@tuc.org.uk

Speaking earlier today (Thursday) at the Northern TUC’s living wage summit – being held at South Shields Town Hall – TUC General Secretary Frances O’Grady called for British workers to get a pay rise, and talked of the boost to public finances if workers across the North East were paid the living wage:

“The living wage has shot up the political agenda, and with one in six UK workers paid below living wage rates – including a staggering one in three in the North East – it’s about time too.

“Figures being published tomorrow by the TUC suggest there are big savings – to the tune of £139m – that could be made by Treasury if the North East’s low-paid workers were paid at least the living wage.

“Workers earning more an hour would pay more in taxes and national insurance contributions leaving the Exchequer £93m better off if all workers in the North East were to get the living wage.

“Similarly, if low earners across the North East were to be paid living wage rates – currently £7.45 an hour outside London and going up to £7.65 next year – the benefits bill would be cut by £47m as less is paid out in means-tested benefits and tax credits across the region.

“No-one is pretending that the living wage is the solution to all the complex social and economic challenges facing Britain, but it’s an important first step in delivering fairness to ordinary people.

“The average worker is poorer today in real terms than a decade ago, and real wages have taken a huge hit – by £1,200 in the North East and by nearly £1,900 in Cumbria.

“The UK’s low-pay epidemic is a scandal that shames modern Britain. Back in the mid-1970s, around two-thirds of economic output went to workers in the form of wages, now it’s barely more than half. While ordinary workers have struggled, a tiny elite at the top has seen its rewards rocket.

“The OECD, the UN and the IMF all believe that governments must adopt policies to promote the earnings of low and middle-income workers. That’s why the TUC is calling for better wages to be at the heart of a plan for the UK’s economic recovery. The time has come for Britain to get a much-needed pay rise.”

NOTES TO EDITORS:

- The TUC’s campaign plan can be downloaded from www.tuc.org.uk/campaignplan

- All TUC press releases can be found at www.tuc.org.uk

- Follow the TUC on Twitter: @tucnews

- The living wage research due to be published by the TUC tomorrow can be found at http://www.tuc.org.uk/economic-issues/economic-analysis/paying-living-wage-would-mean-%C2%A332-billion-boost-public-finances

Contacts:

Media enquiries:
Liz Chinchen   T: 020 7467 1248    M: 07778 158175    E: media@tuc.org.uk
Rob Holdsworth    T: 020 7467 1372    M: 07717 531150     E: rholdsworth@tuc.org.uk
 

Campaigners will today (Tuesday) hold protests at over 30 UK rail stations to mark the twentieth anniversary of the Railways Act, which paved the way for the privatisation of the UK’s rail network.

The protests, which have been organised by the TUC’s Action for Rail campaign, will highlight how rail privatisation has failed to deliver for rail users and taxpayers on a number of key tests:

• Value for money – research carried out for the TUC by the Centre for Research on Social-Cultural Change (CRESC) at the University of Manchester shows that train operating companies are entirely reliant upon public subsidies to run services.
• The top five recipients alone received almost £3bn in taxpayer support between 2007 and 2011. This allowed them to make operating profits of £504m – over 90 per cent (£466m) of which was paid to shareholders. By contrast, the state-run East Coast Mainline will have returned £800m to the taxpayer by the end of the year.
• Affordable fares – twenty years on from rail privatisation the UK also has the most expensive train fares in Europe, with average ticket prices rising nearly three times faster than wages since the recession.
• TUC analysis shows that some season tickets have increased by over £1,000 since 2008. A Reading to London zone 1 season ticket is set to cost £4,904 next year, up from £3,710 in 2008. The TUC’s rail fare rise projector – ­available at www.tuc.org.uk/railfareprojector – shows how regulated fares have increased since 2008.
• Additional investment – the average age of trains has risen since rail privatisation, from 16 years in 1996 to 18 years old today. Just £1.9bn was spent on rolling stock between 2008 and 2012, compared to £3.2bn between 1989 and 1993 (the four years before privatisation).
• Over 90 per cent of new investment in recent years has been financed by Network Rail (the taxpayer-funded body responsible for rail infrastructure), and comes mainly from taxpayer funding or government-underwritten borrowing, according to CRESC.

Separate research carried out for rail unions shows that, rather than reducing costs, rail privatisation is costing taxpayers £1.2bn a year as a result of fragmented services, higher costs of borrowing and money leaking out of the service in the form of profits and dividends.

The analysis, carried out by Transport Quality for Life, also shows that eliminating this £1.2bn-a-year wastage could result in an 18 per cent cut in rail fares across the board.

Action for Rail campaigners will be handing out postcards later today at stations across the country, including London Kings Cross, Birmingham New Street, Liverpool Lime Street and Newcastle. The postcards will call on MPs to put people before profits and return the railways to public ownership.

A photo op will take place at the main entrance to Euston Station between 8 and 8.30am, at which an Action for Rail banner will be unfurled and postcards handed out. If you would like to attend this, or any of the other station protests, please contact the TUC press office.

TUC General Secretary Frances O’Grady said: “Rail privatisation has been a colossal market failure. Rather than bringing in the improvements and investment its cheerleaders promised, it has succeeded only in pushing up costs and increasing the burden upon the UK taxpayer.

“Twenty years on from the Railways Act we have a system of corporate welfare with train companies reliant upon the public purse to turn a profit. Virtually all of this ends up in shareholders’ pockets, rather than being used to improve services.

“Tragically the government is refusing to accept that the current model is broken and is recklessly pushing ahead with the re-privatisation of the East Coast Mainline, despite it thriving as a publicly-owned service. Ministers have learnt nothing from the last 20 years of failure.”

ASLEF General Secretary Mick Whelan said: “Privatisation has proved to be a disaster for this country. Even Margaret Thatcher, that arch advocate of privatisation, admitted that privatisation of the railway was ‘a privatisation too far’. It was a foolish, ideologically-driven policy by John Major’s government which has, each year for the last twenty years, sold Britain short.

“Private companies should be about investment and about risk. But there is no investment and there is no risk. Because the privatised train companies think the public should pay for the investment, they make a private profit, and then move that profit overseas. It’s a disgrace.

“That’s why we think it’s time to bring the railway back into public ownership so that, like the East Coast, the railway can deliver a proper service to the public, and bring money back to the exchequer.”

RMT General Secretary Bob Crow said: “From the horrific consequences of Railtrack at Hatfield and Potters Bar, to the cold hard truth that British passengers are now paying the highest fares in Europe to travel on overcrowded and unreliable services that have been starved of investment, rail privatisation has been a catalogue of shame.

“For 20 years the political class, of all parties, have failed the British rail passengers and workforce, while overseas state operators have been allowed to plunder our services to keep costs down on their own turf. It is a shocking indictment that £3.5bn has been robbed in private dividends while the essential maintenance backlog stands at around £1bn and profit is placed head and shoulders above safety.

“This week we remember that 20 years of private profiteering and destruction on our railways and we step up the fight to bring the entire network back under public control.”

TSSA General Secretary Manuel Cortes said: ”Passengers have paid a very high price indeed for this typical piece of political folly from the Conservatives – fares have more than doubled over the past 20 years.

“They are now the highest in Europe and they are due to go up again by more than inflation for the next five years as well.”

NOTES TO EDITORS:

- Action for Rail protests will take place at over 30 stations across the country, including the following mainline stations:

East of England

Chelmsford                    0800 – 0900

Ipswich                          0730 – 0830

Norwich                         0800 – 0900

East Midlands

Burton-on-Trent            1530 – 1645

Derby                            0800 – 0930

London

Ealing Broadway          1730 – 1900

Euston                           0730 – 0830

Homerton                      0800 – 0900

Honor Oak Park            0800 – 0845

North East

Carlisle                          0730 – 0930

Darlington                     1600 – 1700

Newcastle Central         0800 – 0900

North West

Crewe                            0730 – 0930

Liverpool Lime Street   0730 – 0930

Manchester Victoria      0730 – 0930

Preston                           0730 – 0930

Scotland

Berwick                         0700 – 0900

Inverkeithing                 0730 – 0830

South East

Chatham                        0800 – 0900

Gillingham                    0800 – 0900

Reading                         1700 – 1800

Rochester                       0800 – 0900

South West

Bristol Temple Meads   0730 – 0900

Clifton Down                 1300 – 1500

Weymouth                      0730 – 0915

Wales

Cardiff Queen Street      1600 – 1800

West Midlands

Birmingham New Street 0800 – 0900

Wolverhampton              0730 – 0900

Yorkshire and the Humber

Hebden Bridge                0700 – 0800

Mytholmroyd                  0700 – 0800

Scarborough                    0730 – 0930

Sheffield                          0800 – 0900

Hull Paragon                   0800 – 0900

Todmorden                      0700 – 0800

Wakefield Westgate        0730 – 0930

York                                0745 – 0930

- If you would like to find out whether there is a protest planned in your local area please contact the press office.

- Action for Rail brings together the TUC, ASLEF, RMT, TSSA and Unite to work with passenger groups, rail campaigners and environmentalists to campaign against cuts to rail services and staffing and to promote the case for integrated, national rail under public ownership. For more information please visit www.actionforrail.org

- The TUC's campaign plan can be downloaded from www.tuc.org.uk/campaignplan

- All TUC press releases can be found at www.tuc.org.uk

- Follow the TUC on Twitter: @tucnews

Contacts:

Media enquiries:

Liz Chinchen   T: 020 7467 1248    M: 07778 158175    E: media@tuc.org.uk
Rob Holdsworth    T: 020 7467 1372    M: 07717 531150     E: rholdsworth@tuc.org.uk

Allowing workers to sit on company boards would not only mean top executives’ pay was set at more reasonable levels, but would also encourage the long-term success of individual firms, as both employees and directors worked together in the best interests of company performance, according to two reports published today (Tuesday) by the TUC.

The TUC has long argued that corporate governance laws in the UK are missing a trick by preventing worker representatives from sitting on remuneration committees. It also sees an important role for workers on boards as a way for companies to emerge stronger from the economic crisis.

In the two reports – one looking at the European experience and the other setting out the arguments why the UK should set out on a similar path – the TUC argues that the UK’s short-termist approach (based on a model relying solely on shareholders to hold companies to account) has delivered neither economic success nor social justice.

Instead a fixation with short-term gains has led to poor productivity, low investment and wages falling as a share of GDP. This, say the reports, has had the end result of hitting demand and hurting companies in the long run.

Workers on Board – which looks at how the UK workforce might become more involved in the running of companies they work for – says that the UK’s corporate governance rules have failed to keep pace with the new world of share ownership.

With over 50 per cent of UK shares held by overseas investors, and with UK institutional investors increasingly reliant on short-term share trading as a route to profit, deciding what lies in the best long-term interests of a company can no longer be left to shareholders alone, says the report.

Instead Workers on Board suggests that involving employees in the running of companies would not only be a genuine break with the past and the UK’s failed system of corporate governance, but would also harness the contribution of people who have the long-term development of the company at heart.

Workers on Board says that countries which have included the participation of worker representatives within their company structures are also economies with higher R&D investment, better employment rates, stronger economic success and lower rates of poverty.

The report says that allowing workers seats on company boards wouldn’t be a solution to all the UK’s economic problems, nor would it mean workers having a veto on decisions.

But as it is in the interests of staff that the company they are employed by does well, and their experience will have given them vital knowledge of the organisation and the environment in which it operates, employees’ involvement could bring benefits not just for the workforce but for their employers as well.

The accompanying report, Workers’ Voice in Corporate Governance: A European Perspective, looks at the ways in which workers are involved in the management of European companies – from being a part of the top team to having a voice at annual general meetings and a seat on company boards.

The report finds that far from simply being a German phenomenon – as is the common perception – employees have formal roles to play in the management of companies right across Europe, with workers being represented on company boards in 19 European countries including the Netherlands, Sweden, France and Austria.

Both reports note that the financial crash and its economic fallout have led to an increased interest in pursuing the option of worker voice in corporate governance in the UK. Both say there’s a growing recognition of the limits, if not the failure, of the traditional shareholder model and that a new united front involving workers and managers might just be the solution to put companies on a firmer footing for the future.

Commenting on the reports, TUC General Secretary Frances O’Grady said: “Achieving a true worker voice across Britain’s workplaces is at the heart of the TUC’s new campaign plan. Seats for the workforce on company boards would help inject a much-needed dose of reality into boardrooms and put the brakes on the multi-million pay and bonus packages which are fast becoming the norm in corporate Britain.

“The move would also help put firms on a clear trajectory out of the economic difficulties many UK companies are currently facing and assist boards to focus on the strategies and investments needed for long-term company success.

“The European experience shows that involving workers in management structures is not something for UK firms to fear. Instead, it’s a concept companies should be embracing as the clamour for a more sensible, strategic approach to industrial democracy becomes ever popular.”

The reports set out a number of changes that are also needed if the UK’s system of corporate governance is to better help businesses focus on long-term success. These include:

• Directors’ duties should be changed so their main responsibility is the long-term success of the company, rather than the interests of shareholders.
• To help minimise the influence of short-term share traders, anyone holding company investments should have to do so for a minimum of two years before being allowed a vote at company AGMs.
• A mandatory system for the representation of workers on company boards. The TUC is looking at different options for putting this into practice in the UK and could help develop a network (and training) for worker representatives to help individual employees understand what would be required of them and give them the skills to take part effectively in company decision-making.

NOTES TO EDITORS:

- Workers on Board is available at https://www.tuc.org.uk/sites/default/files/Workers_on_board.pdf and Workers’ Voice in Corporate Governance: A European Perspective at https://www.tuc.org.uk/sites/default/files/A-European-perspective-on-corporate-governance.pdf

- The TUC’s campaign plan can be downloaded from www.tuc.org.uk/campaignplan

- All TUC press releases can be found at www.tuc.org.uk

- Follow the TUC on Twitter: @tucnews

Contacts:

Media enquiries:
Liz Chinchen T: 020 7467 1248 M: 07778 158175 E: media@tuc.org.uk
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: rholdsworth@tuc.org.uk
Elly Gibson T: 020 7467 1337 M: 07900 910624 E: egibson@tuc.org.uk