How the budget affects women

Not only a failure to recognise the importance of social as well as physical infrastructure, but women lose.

Low paid workers will lose the most from cuts and changes to Universal Credit, with women and ethnic minorities hardest hit according to new analysis published earlier this week.

Universal Credit is a single monthly payment for people in or out of work. It replaces some of the current benefits and tax credits: Housing benefit, Child Tax Credit, Income support, Working Tax Credit, Income-based Jobseeker’s Allowance, and Income-related Employment and Support Allowance.

This change has raised several issues, not least that if you live with someone as a couple and you are both entitled to claim UC, one monthly joint payment is paid into a single bank account.

In addition, it is paid monthly in arrears so it can take up to six weeks after you make your claim to get your first payment – and you have to apply online.

The Women’s Budget Group and the Runnymede Trust, a race equality think tank, analysed the distributional impact of a series of changes to Universal Credit announced in 2015 and 2016, including the cut to the work allowance, the new two-child limit, the freeze in payment levels, removal of the family element and the change in the taper rate.

Their analysis showed that:

By April 2021 employed individuals who live in households claiming Universal Credit (UC) will be £1200 a year worse off than they would have been under the original UC system.

57 per cent of this loss is due to the cut to the work allowance. Claimants not in work will be around £500 a year worse off.

Women will lose more than men: 2.2 million female claimants in employment will lose an average of £1,400 a year and 3.6 million female claimants not in employment will lose an average £600 a year.

Black employed women are set to lose the most; around £1500 a year.

Families with children will be worse off than households without children. 760,000 families with three or more children will be on average £2,600 a year worse off. £1200 of this loss is as a result of the two child cap;

The most affected are the 230,000 one-earner couples with 3 or more children, who stand to lose £3891 a year, followed by the 132,000 two-earner couples with three or more children who will be £3287 worse off.

That means that more than 1 million children in working families will be adversely affected;

Asian families with three or more children will lose over £1,370 on average from the two child cap alone – and more than 100,000 families will be affected.

The changes in Universal Credit come on top of a series of other cuts and changes to the benefit and tax system which have disproportionately affected women and Black and Minority Ethnic (BME) women in particular.

It is sometimes argued that the increase in the National Living Wage and increased personal tax allowance will have compensated for these cuts for universal credit claimants, but this new analysis shows that this is not likely to be the case.

5.9 million women living in households eligible for Universal Credit under 2013 rules will lose £4406 a year by April 2021 as a result of the combined impact of all changes to benefits, tax credits, universal credit, income tax, National Insurance Contributions and the National Living Wage introduced since June 2010.

Black women, whether employed or not, stand to lose £5030 a year. In relative terms this amounts to 28 per cent of the net individual income of those not in employment and 20 per cent of those in employment.

Asian women not in employment will lose 32 per cent of their net individual income – 20 per cent for those in employment.

Employed women will lose over ten times as much from cuts and changes to benefits and tax credits as they will have gained from the increased National Living Wage and personal tax allowance – 12 times as much if they are black.

Employed men will lose over six times as much.

Responding to the Autumn Budget, announced by Chancellor Philip Hammond on 22 November 2017, Dr Mary-Ann Stephenson, director of the Women’s Budget Group, said there were too many areas in the budget where the Chancellor ‘chose to tinker at the margins of problems rather than make the systemic changes and investment needed’.

“With the NHS, education system, care system and family budgets all stretched to breaking point we need decisive action if we are to build a ‘stronger, fairer, better Britain’,” she added.

“What we saw […] in the main, was a series of relatively minor announcements which failed to address underlying issues.

“£185million a year to address the waiting time for Universal Credit is welcome, but barely addresses the issues with the design and cuts to Universal Credit,” she continued.

The additional funding for pupils taking maths, more computer science teachers and £1000 extra per teacher for training, she said, “is welcome, but does not address the budget squeeze facing the sector.”

The Chancellor, she continued, “failed to say anything about the continued crisis in social care.

“Our work shows that the social care funding gap will be between £2.8billion and £3.5billion by the end of this parliament; and 17 per cent of men and 26 per cent of women aged 65 or over already have unmet needs.”

And regarding health spending:

“£2.8bn over three years is insufficient to deal with the crisis in the health service.

“We know that in 2015/16 NHS providers were £2.5billion in deficit.

“The Office for Budget Responsibility has said that spending on the NHS needs to increase by 4 per cent a year above inflation in order to meet increased demands.

And she pointed out that women are more likely to need NHS services and the majority of those working in the NHS are women.

Housing, she said, was the one area where there were more significant announcements.

“These included some welcome measures, including additional investment in house building, the council tax premium on empty homes, increases in local housing allowance rates in areas where affordability pressures are greatest and action to tackle rough sleeping.

“The review of land-banking by developers is also welcome and long overdue.

“However, the continued focus on home ownership doesn’t address the concerns by those in greatest housing need.”

“Phillip Hammond repeatedly talked about the need to invest to secure a bright future for Britain.

“But his plans for investment in infrastructure failed to recognise the importance of social as well as physical infrastructure.”

“Social infrastructure – including health, education, and care – is as vital to the economy as roads, rail and investment in high tech.”

The Women’s Budget Group, an independent, not-for-profit think tank that has scrutinised the gender impact of social and economic policy decisions of successive governments for more than two decades.

It has published a series of briefings on different aspects of the budget. To read them, click here.

To read the Women’s Budget Group’s analysis of the problems of Universal Credit, click here.

The Women’s Budget Group and the Runnymede Trust called on the Chancellor to ensure his November budget was fully equality impact assessed, and for him to introduce measures that reduced this unfairness, but it is not clear that he did either.

So you have to really wonder what is going on. And why.

There is now at least a cross-party effort being made to force ministers to publish details of the impact of their policies broken down by gender, race, age, disability, class and region, the Guardian reported, after analysis showed women continue to bear the brunt of austerity.

The Labour party leader Jeremy Corbyn has signed a letter with 126 other MPs, including members of his own party, the Liberal Democrats, SNP and Greens, calling for an immediate equality assessment of all government policies.

The letter to the education secretary, Justine Greening, whose brief covers equalities, accuses the government of failing in its duty to sufficiently consider the impact of its actions on all groups in society.