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Rt. Hon. Stephen Byers - Former Secretary of State for Trade and Industry (Dec 1998 - Jun 2001)

Equal Opportunities Commission Seminar on Work and Parents Green Paper

London.

Wednesday, February 21, 2001

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The Prime Minister recently said that our next steps must be "to break down the barriers that hold people back". To build a society based on a radical extension of opportunity, matched by a true sense of responsibility.

To create opportunity for all in a world of change.

As standards of living improve, quality of life becomes an issue for us all. It is increasingly important whether you're an employee or an employer.

Finding new solutions to help working parents balance work and life is part of that.

In the last 25 years there have been huge changes in the world of work and the way people want to work. We can't ignore these changes any longer.

More people than ever are in work in our country - over a million more since the election.

The number of women with dependent children who are working has also increased dramatically. Increasing by almost one million between 1984 and 1997 - from three and a half million in 1984 to four and half million in 1997.

In two thirds of families both parents work outside the home - up from fewer than 50% in the 1980s.

More men want to take time off after the birth of their child or devote more time to looking after their son or daughter.

And people are choosing to start families at a later age - and a later stage in their careers.

At the same time, the nature of our economy is changing rapidly. Today's economy is based on knowledge and skills; on exploiting new ideas and technology and meeting customer demands.

In the modern economy we need to harness fully the energy and talents of our workforce.

But in a tight labour market, employers find it increasingly difficult to recruit and retain skilled people.

In this changing world, it's vital we recognise the pressures on working parents and business.

That we look at ways support can be increased to help parents meet the challenges of family life. And help business meet the challenges of the modern economy.

That's why last December I published a Green Paper, setting out proposals to give more help to new parents and greater support to the businesses employing them.

Our proposals were based on the most comprehensive review of work and parents ever undertaken by a Government in Britain.

In the light of that review, we set out nearly 50 options to give more support for new parents and for the businesses that employ them.

They include options to help parents, such as extending or increasing maternity leave. Or by allowing an adoptive mother or father to take paid leave similar to maternity leave when adopting a child.

And to help employers, through better payment mechanisms and simplification.

We also set out a number of options around flexible working, that I'd like to speak more about later.

Not all the options in the Green Paper can be taken forward and so we've been talking to people to learn about their priorities, whether as an employer or as an employee.

My team and I are going round the country, talking to parents, employers and interest groups to stimulate the debate and to hear directly what they think about our proposals.

We want to hear from parents on what options will help them most in balancing work and family commitments.

And to hear from companies of all sizes who have to operate in ever more competitive markets.

All of you are making an important contribution to this debate today.

This morning I want to share with you some of the emerging findings of the consultation. And to focus the debate in the last few weeks on key issues.

As well as hearing views at meetings, we've received over 150 formal responses, largely from parents but also some from large and small businesses, and charities.

Perhaps what is most interesting in the business responses, is that young entrepreneurs see the case for change, the need for action, much more clearly.

So far, there is perhaps a surprising consensus on some topics.

With the two most popular options so far being paid paternity leave and new support for adoptive parents. Popular with employers and parents.

I am confident that the Prime Minister's announcement on Sunday that we've agreed in principle to the introduction of paid paternity leave will be widely welcomed.

Leave for an adoptive parent has also gained considerable support from employers and employees.

In the past there's been a failure to recognise and support, in practical terms, the vital role that adoptive parents play.This has to change.

I have no doubt that radical proposals in this area which will help adoptive parents discharge their responsibilities will have broad and popular support.

Balancing work and home life is difficult for all parents but especially for those that adopt.That's why they need to know that there will be a new deal for them in the near future.

But I have to say there is little consensus on the issue of providing more flexibility in working hours for parents. It is this issue which I particularly want to look at - and which I hope you will explore further during the discussions today.

Parents have emphasised the real difference flexible working practices could make. They have told us that more flexible working arrangements is the most important thing the Government could do for them.

Mothers want to be able to ease back when they return from maternity leave. Parents want to be able to work shorter or more flexible hours so they can juggle their parental and work responsibilities.

Last year, for example, I heard from a mother whose employer wouldn't let her start work fifteen minutes later in order to drop her kids off at school.

As a result she had to leave the company. And the company lost a skilled employee and incurred extra costs of recruiting a replacement.

Mothers want to work - they don't want to live off the state; they want to set an example to their children, to reinforce the work ethic - but many can't do so without flexible working arrangements.

Yet many companies are finding flexibility works for them.

A recent Sunday Times survey of the fifty best companies to work for in Britain showed that many top British companies offer higher levels of flexible working than the average.

And these companies have higher stock market returns and higher levels of productivity and profitability than their competitors.

Companies like Deloitte and Touche where any one with six months service can cut back to part time work.

Or Friends Provident, where 85% of staff take advantage of their flexi-time policy. Where both the company and employees benefit from compressed hours, job share and home working.

Or BP-Amoco. Record profits announced last week. It is clear that their profitability has not been hit by the fact that they allow mothers to chose what hours they want to work when they return after maternity leave.

Or IBM, where mothers with two years service can choose to go part time for two years, with a guarantee of full-time employment after that.

In a recent survey by Personnel Today, 62% of those interviewed agreed that all working parents should be able to work part time. This suggests that human resource managers see the benefits.

Let's be clear. This is an issue which affects the bottom line.

Businesses face high costs if they don't help parents to remain in the workplace.

Typically it costs Ł3,500 for an employer to recruit a single employee. More if they are highly skilled. And that's without considering the management time involved or the investment in training.

That means that if only 10% of new mothers changed their mind about returning to work, the total benefit to employers through reduced recruitment costs could be as much as Ł30 million.

Getting the policies right can improve productivity and profitability.

Ensuring that all staff can fulfil their potential; enabling the business to maximise the contribution of all.

Ensuring the more effective use of resources, by tailoring the needs of the job and the individual more closely.

Creating a more motivated, committed workforce.

Promoting a forward looking flexible working environment which helps to attract the best new recruits.

Helping to retain the experience and expertise of staff who may otherwise leave.

And reducing levels of stress - which in turn reduces absence rates and improves performance.

These benefits are not just theoretical. They're real benefits which forward thinking employers are realising.

It's clear from our discussions that we need a much more flexible culture. But we must recognise that there are barriers to providing flexible working arrangements. That there are potential problems that will need to be overcome

Some businesses have told us they can face difficulties in managing cover.

They have raised concerns that they may face higher costs. That changing working patterns may disrupt their team. And that they may find that employees are not there when they, or their customers, want them.

Whether real or perceived, we need to find solutions which overcome these concerns.

We must make progress on this issue.

Not just in the interests of social justice. But to ensure the continued strengthening of our economy.

At the beginning of the 21^st century there is a social and economic imperative for employers to offer committed members of staff with family responsibilities more flexibility in the hours they work.

There are an estimated 1 million job vacancies. Flexible work patterns might well be the answer.

Currently, 1.5 million parents with children under 16 who don't work have GCSE qualifications.

Those are skills lost to the economy.

We must - and we will - find a solution. We can do so either through legislation or a voluntary approach supported by incentives.

We need to focus debate on the main options for flexible working.

In looking at these options, we must also ensure that they take account of the needs and concerns of business, especially small businesses who can be more affected by change.

This Government is committed to ensuring that enterprise is not stifled by regulations.

I want to hear views.

On whether we should allow all employers the right to refuse a request to work reduced hours if it would cause harm to the business. And if so how we might define such a harm test.

And whether we might exempt small businesses. And if so, how should we define "small" businesses?

Employers tell us that legislation isn't the best way forward. In fact, employers who already offer many forms of flexible working are the most vocal opponents of legislation. They know what they do now gives them a competitive advantage.

Employers want us to pursue the voluntary route.

We need to identify what voluntary mechanisms can bring about a commitment to change from that part of the business community that doesn't already offer flexible working.

I want to hear, from employers, what incentives would make them commit to change.

Business should be clear. Parents in this country overwhelmingly want a more flexible working environment. I am committed to ensuring they have more opportunity and choice.

So today I lay down a challenge to business. Engage in the debate. Work in partnership with us to find practical, lasting solutions.

Not just for the benefit of parents. But because it makes good business sense.

As I mentioned earlier, many of our best companies, world class businesses, offer flexible working. They do so because it's good for their business.

There is a danger that firms who resist change will be left behind. They will find it harder to recruit, to motivate and to retain the skilled staff they need. All of which affects their profitability and productivity.

Government has a role to play in helping manage this change. We won't just leave business to get on with it. We will seek to help businesses adapt and modernise their working patterns.

That is why we have set out proposals for helping small businesses offer more innovative working arrangements.

We are seeking views on ways of providing advice and help on good practice. And we're looking at how we might help small firms meet the costs of adopting flexible working.

Last week I published new proposals for an active industrial policy based on skills, enterprise and innovation. Enabling firms to adopt new working practices is part of that.

Innovation is not just about developing new products and services. It is also about finding new ways of working. New ways of working which can strengthen enterprise by enabling businesses to recruit the skilled staff they need.

No change is not an option.

And it is important in this crucial debate that we don't confuse the provision of support for working parents and other decent standards in the workplace with red tape.

There are those who say that paying a minimum wage is a bureaucratic burden. Try telling that to the security guard who was being paid Ł1.80 an hour for night and week-end working and has hard work rewarded by his pay being more than doubled.

Some say being required to provide four weeks paid holiday a year is red tape. Try telling that to the office cleaner who for the first time can take time off with her family over Christmas and now receive holiday pay.

Claims that red tape is costing business more that Ł10 billion are simply wrong. The majority of costs result from improved pay and conditions, not administrative costs.

For the sake of clarity, and to ensure a proper debate about these important issues, I am today publishing in respect of those areas for which I have government responsibility, a breakdown of the British Chambers of Commerce "Burdens Barometer" which for the first time distinguishes between the benefits to employees and the administrative costs.

We estimate that the actual cost of red tape is around 50p per employee per year for the introduction of the National Minimum wage, paid holidays, parental leave, time off for family emergencies fair treatment for part timers and improved maternity arrangements.

We need to get past this futile label of "red tape" for decent standards and concentrate on the real issues. The government is listening to business and will regulate only where necessary and with a light touch. The changes we made to the Working Time Regulations saved business Ł13 million a year in implementation costs. The Regulatory Reform Bill currently going through Parliament will provide a fast track for reducing burdens and scrapping outdated legislation.

Only last month Arthur Andersen found that the UK is the country that overall provides the most entrepreneur friendly environment, thereby fostering growth companies most effectively.

Forward-looking innovative companies have realised the benefits of providing employees with good working conditions. In an increasingly tight labour market, the companies that succeed in the future will be the ones that can attract and retain skilled staff.

The responses to date suggest that there is a consensus emerging around many of the options from both parents and businesses. There will always be hard-liners on both sides who will refuse to accept change or think that it does not go far enough.

But I want as many employers as possible to be active partners in change which can benefit everyone.

The consultation ends on 7 March - two weeks today.

I hope that - starting today - we can concentrate discussion in the final weeks on practical, effective ways of giving parents more choice in the workplace. That business will engage in the debate and that we can find a solution together.

The right policies will not only support parents but also enable business to recruit and retain skilled staff thereby increasing productivity and helping the UK to remain competitive.

The issues raised in the Green Paper are vital to all of us. Quality of life issues are becoming increasingly important, and the way society treats parents is at the heart of that.

A society where being a good parent and good employee are not in conflict is a prize for us all.

Other speeches by Rt. Hon. Stephen Byers - Former Secretary of State for Trade and Industry (Dec 1998 - Jun 2001)

(the following are available from the archive)