I have always thought that the government's focus on extending and extending the paid period of maternity leave (first to six months, then nine and then planned to be extended to 12) missed the vital point that many women cannot afford to live on SMP. From April, this will be £123 per week. That is significantly below the national minimum wage for a full time employee (which no one can really live on anyway, hence the need for all the tax credits, etc). What forces a lot of women back to work is not the end of SMP, but the cumulative effect of months of receiving payments at such a low level.
It seems to me that what will really help the poorest working women, the ones who need it the most and who don't have generous company schemes, will be extending the period of 90% or 100% pay at the start of maternity leave, to at least allow those women that time free of worry. After more breathing space of that sort, surely they are more likely to return to work confident and motivated - hence benefiting the economy through their productivity and the taxes they pay?
It is typical Daily Mail rubbish to suggest that this will put employers off employing women. Some employers are (sadly) already put off, but that is because of the length of maternity leave, not the pay. That much is obvious from the quote from Mark Prisk - who doesn't even refer to the money, just the absence from work. Small employers can recover more than 100% of the cost of SMP from the government, and larger employers approximately 90%. The DM says it is "not clear" if that will still apply". I think what they mean is "we haven't specifically been told it will, so we are going to assume the worst".
As for whether the economy can afford it, firstly it's all relative and the cost is very small compared to, say, bank bailouts. Secondly, it needn't cost that much if you focus on increasing the period that is paid well, rather than just increasing the period that is paid. Thirdly, it is actually the countries which provide for decent social support networks and benefits that seem to be weathering the economic storm the best. The income gap between the richest and the poorest actually seems to make a country cope less well (even leaving aside any moral arguments).
And breathe....