Paternity leave will be bumped up to six months, Gordon Brown was expected to tell union leaders today — despite fears it will heap pressure on small businesses struggling to cope with the recession.
But promises that new mothers will be able to take up to a year off while paid are being abandoned because the £500m bill can no longer be met.
That breaks Labour’s 2005 manifesto pledge to lengthen statutory entitlement before the next election.
The Prime Minister is addressing the TUC conference in Liverpool and is expected to outline plans that will mean new fathers can divide up parental leave from April 2011. Currently, they are only able to take two weeks.
It would mean mothers going back to work after six months can transfer the rest of their entitlement to their partner, with statutory pay of £123 a week being handed out for the next three months — with the remaining 12 weeks unpaid.
Business leaders reacted angrily, claiming it will heap pressure on small firms that are already battling to survive the current economic climate.
Chamber of Commerce director general David Frost said: “There is absolutely no guarantee that business are going to be back to full health by 2011. This is going to be an administrative nightmare for businesses.
Small businesses can claim back 100% of paternity pay, though larger businesses can only reclaim 92%.
Across the UK, more than 400,000 men a year are expected to be eligible.
While the concession on paternity rights is expected to please powerful union bosses at the annual conference, it is likely to be overshadowed by the rest of the Prime Minister’s speech.
For the first time he is expected to admit the government will have to cut public spending.