Expand paid parental leave

Birth baseline

The central case starts from about 650,000 UK births and models higher statutory paid partner and parental leave.

• ONS records 594,677 England and Wales births.
• UK-wide births are scaled upward.
• Take-up assumptions drive the estimate.

Core trade-offs

Parents gain time and income security. Taxpayers fund statutory payments and employers fund cover. Poor design can increase hiring risk for likely parents.

• Parents gain paid time.
• Taxpayers and employers pay.
• Hiring discrimination risk rises.

Illustrative fiscal impact

+GBP 0.8bn to +GBP 8.0bn. Central estimate: +GBP 2.8bn.

• Positive numbers mean public-finance pressure; negative numbers mean Exchequer savings.
• Gross costs are separated from tax, NI and benefit offsets.
• Private business costs are not automatically fiscal costs.
• Behavioural responses widen the range materially.
• This is not an official costing.

Economic impact by 2027-28

• Jobs: May support parental attachment, but small firms face cover and hiring risk.
• Wages: Raises paid leave income for new parents, especially partners.
• Prices: Small aggregate price effect; employer cover costs may pass through.
• GDP / productivity: Likely negative short run from absence cover; long-run participation gains uncertain.

Assessment

Paid parental leave can reduce unfair family penalties, but it does not pay for itself in the short run. The fiscal cost depends on replacement rates, eligibility, employer recovery and take-up by second parents.

Confidence: Low. Take-up, replacement rates and employer cover costs are the weak assumptions.

Main risks

• Take-up uncertainty: Partner take-up can change sharply if pay is more generous.
• Cover costs: Employers need temporary cover or accept lower output.
• Discrimination risk: Employers may perceive higher expected costs for likely parents.

Safeguards

• Use individual non-transferable quotas.
• Reimburse small firms promptly.
• Monitor hiring by age and gender.

Academic evidence

UK government evidence

Sources

• PolicyLens illustrative scenario methodology for expand paid parental leave Internal - PolicyLens, 2026
• Births in England and Wales: 2024 Official statistics - Office for National Statistics, 2025
• Rates and thresholds for employers 2026 to 2027 UK government guidance - HMRC, 2026
• The Economic Consequences of Parental Leave Mandates Academic article - Ruhm, Quarterly Journal of Economics, 1998
• Children and Gender Inequality: Evidence from Denmark Academic article - Kleven, Landais, Posch, Steinhauer and Zweimuller, American Economic Journal: Applied Economics, 2019
• Employment Rights Act 2025 - Economic Analysis UK government report - Department for Business and Trade, 2026
• Workers' Charter 2026 Party policy source - Green Party of England and Wales, 2026

Other Green policies

• Raise the minimum wage to £15
• Index public-sector pay to inflation
• Add public-pay restoration premiums
• Raise low-paid public-sector wages
• Cap organisation pay ratios at 10:1
• Protect pay in transition schemes
• Create a single worker status
• Equal terms for outsourced workers