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Rachel Reeves MP: 'Mummy tax' cut in maternity pay is unfair

Tax cutsIn this week's guest blog, Rachel Reeves MP - who is Shadow Chief Secretary to the Treasury and is herself pregnant with her first child - says working mothers across the country will be unfairly affected by the recently-announced, real-terms cut to maternity pay.

On Wednesday we found out just how much David Cameron and George Osborne's economic plan had failed. Our economy is forecast to shrink this year. Prices are set to carry on rising faster than wages next year. Almost 1 million young people young people are out of work. And the result of this failure on jobs and growth is that the government is even failing on the one test they set themselves – to balance the books and get the debt down by 2015.

So after missing his borrowing targets, and with the economy flatlining, the Chancellor was forced to come back to the country and ask for more. George Osborne suggested that he was targeting benefit scroungers and the work-shy, but he is hitting striving families who are already struggling with the rising cost of living.

Six in ten households who will be hit by the real terms cuts to benefits and tax credits announced this week are actually in work. A one earner family on £20,000 with two children will lose £279 per year from the government's changes in April – and that's not including the VAT rise.

And he failed to mention that mums across the country will be footing the bill for this government's economic failure. In the small print of the Chancellor's mini-budget is a plan to hit working mums with a real terms cut in maternity pay worth £180 by the time of the next election. This will affect 232,000 women who claim maternity pay and 59,000 who claim maternity allowance.

Maternity leave in diaryAs somebody who is expecting their first child in the new year, I am going through the first steps of planning my maternity leave. Having a child is going to be a moment of great excitement and joy for me and my entire family. I will be taking maternity leave which will allow me to recover from the birth and let me spend time with my new baby. I will treasure every moment of those all important first few months.

But I worry that other mothers, those who rely on statutory maternity pay, will no longer have the choice and be forced back into work because of this cut in their maternity pay. Research shows that women on low incomes are especially unlikely to take their full maternity leave because they can't afford to stay off work. I don't want this country to return to the days when some mums had the right to maternity leave, and others simply can't afford it. I fear that this government is taking us in that direction.

And it is not just in maternity pay that women are paying the cost of the last two years of this government's economic mistakes. House of Commons Library research has confirmed that women will be hit four times harder by the cuts to benefits and public services announced in the autumn statement. These changes come on top of other deep cuts that will hit pregnant women on low incomes, such as the abolished Sure Start Maternity Allowance and the Health in Pregnancy Grant. Then again, it is not hugely surprising that women have got a raw deal from this government. After all there are only 4 women out of 23 ministers in the Cabinet.

At the same time there is one group of people that gained significantly from Osborne's Autumn Statement. If you earn over a million pounds each year, than next year you will receive an average tax cut of £107,000. It beggars belief that whilst taking from mothers on low incomes with one hand, the Chancellor gives to millionaires with another.

So when George Osborne spoke of his welfare cuts tackling the unfairness of work-shy benefit seekers, with 'their blinds down' whilst others are at work, he forgot to mention that his measures hit mums across the country who are at home looking after their new-born child. It's the work of an unfair, incompetent and out-of-touch government, that simply doesn't understand the pressures mums face every day.

Last updated: 16-Apr-2013 at 12:34 PM