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Cumulative impact assessment on Budgets needed


EHRC, report, Conservative governments, Budgets, cumulative impact assessmentThe poorest among us are set to lose nearly 10 per cent of their incomes.

The poorest in society are being hit the hardest by changes to tax, social security and public spending reforms, and are set to lose 10 per cent of their income, a new report has revealed.

This report by the Equality and Human Rights Commission (EHRC) carried out ahead of the November budget, assessed the impact that changes to all tax, social security and public spending reforms from 2010 to 2017 will have on people by 2022.

Undertaken as a ‘cumulative impact assessment’, the report, which looked at the impact the reforms have had on various groups in society, suggested the decisions made will also affect some groups more than others:

Women will suffer a £940 annual loss: more than double the loss for men – who will lose £460 on average – at every income level;

Lone parents will struggle with a 15 per cent loss of income, while the losses for all other family groups are between 0 and 8 per cent;

Black households will face a 5 per cent loss of income – more than double the loss for white households;

Families with a disabled adult will see a £2,500 reduction of income per year – the reduction is £1,000 per year for families with no disabled adult;

Families with a disabled adult and a disabled child will be faced with a £5,500 reduction of income per year – again, compared to £1,000 for families which do not have a disabled adult and child; and

The biggest average losses by age group, looking at men and women, are being experienced by the 65-74 age group, with average losses of around £1,450 per year, and the 35-44 age group with average losses of around £1,250 per year.

The poorest among us are set to lose nearly 10 per cent of their incomes – equivalent to £1 in every £8 of net income. The richest will lose barely 1 per cent – or about £1 in every £250 of net income.

The work focused on protected characteristics, as set out in the Equality Act 2010. It also looked at other categories, for example, household income and the type of people living in the household.

Researchers looked at all of the changes from the 2010 to 2015 Conservative and Liberal Democrat coalition government and the 2015 to 2017 Conservative majority government that can be compared using data from the UK Family Resources Survey (FRS) and Living Costs and Food Survey (LCF).

The Conservative minority administration elected in June 2017 has not yet announced any changes. However, any changes announced in the Budget on 22 November will be included in the final report from this project, due to be published in early 2018.

And this study repeats what many others have said: women will lose more than men. This is because women are more dependent than men on benefits and tax credits, which have seen huge cuts since 2010.

The Equality and Human Rights Commission is now calling on the government to:

Commit to undertaking cumulative impact assessments of all tax and social security policies ahead of the 2018 budget;

Reconsider existing policies that are contributing to negative financial impacts for those who are most disadvantaged; and

Implement the socio-economic duty from the Equality Act 2010 so public authorities have to consider how to reduce the impact of socio-economic disadvantage of people’s life chances.

The assessment undertaken by the Commission considered changes to income tax, national insurance contributions, indirect taxes (VAT and excise duties), means-tested and non means-tested social security benefits, tax credits, universal credit, the national minimal wage and the national living wage.

The Commission is responsible for making recommendations to government on the compatibility of policy and legislation with equality and human rights standards.

The EHRC said the government had consistently refused to carry out a cumulative impact assessment of its policies, preferring to focus on the narrow impact of individual policies, but this study showed that such an exercise was both possible and necessary.

David Isaac, the chair of the Commission, said: “The government can’t claim to be working for everyone if its policies actually make the most disadvantaged people in society financially worse off.

“We have encouraged the government to carry out this work for some time, but sadly they have refused.

“We have shown that it is possible to carry out cumulative impact assessments and we call on them to do this ahead of the 2018 budget.

“If we want a prosperous and, in line with the Prime Minister’s vision, a fair Britain that works for everyone, the government must come clean and provide a full and cumulative impact analysis of all current and future tax and social security policies.

“It is not enough to look at the impact of individual policy changes.

“If this doesn’t happen those most in need will face an extremely bleak future.”

To read the full report click here.

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