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Women lose in Summer Budget 2015

Lego figure holding the red Budget briefcaseWednesday’s budget made for extremely grim listening and reading. Low-income women and their children will be pushed into poverty at the expense of increased spending on defence and tax breaks for the affluent. Women were always going to be penalised by this budget, not least because of the well-trailed £12 billion worth of cuts to the ‘welfare’ budget, but some of the detail and framing language is even worse than predicted.

Our recent report sets out why gender inequality has risen as the result of welfare reform. Women’s caring roles and low-paid jobs mean that different groups of women are particularly impacted by austerity measures. Summer Budget 2015 is no different. The House of Commons Library has already issued analysis estimating that 70% of the £34bn pounds of savings to be made by 2020/21 will come from women’s pockets. As HMT has not published an Equality Statement alongside its budget, outlining how different groups will be affected by its spending choices, we can only assume that it does not care that this will undermine gender equality, and increase women’s and children’s poverty.

The full budget is, after all, more or less entirely gender-blind. Despite the fact that women depend on social security and public services more than men in order to provide care for society, Osborne’s speech in the Commons yesterday stipulated that social security is for ‘elderly, vulnerable and disabled people’, and made clear that motherhood and unpaid care work are a drain on the public purse.

There are umpteen ways in which women will lose out, directly and indirectly. An average of 20% of women’s incomes comes from benefits and tax credits (double that of men’s), so the four year freeze on working age benefits will fall heavily on women. Slashing the household benefits cap to £20,000 outside London will be devastating for many unpaid carers. (The existing benefits cap is projected to reduce household income for thousands of Carer’s Allowance claimants by over £100 per week.) ESA claimants in the work-related activity group will see their benefits cut by almost £30 a week, which will also impact on their carers. The cap on public sector pay will disproportionately affect women who are two thirds of that workforce.

Harsher conditionality will see lone mothers pushed into work-related activity when their youngest child is two years old, and into job-seeking when that child turns three. Yet the proposed increase in (not-fit-for-purpose) childcare provision will not meet women’s needs. Support for mothers through child tax credits, and related components of Universal Credit and Housing Benefit will now be limited to two children only. Women’s reproductive rights are to be policed and taxed by a government that is unabashed about attempting population control amongst low-income women, except as a result of rape. It beggars belief.

The only other mention of women in the budget is the announcement of £3m for refuge provision for survivors of domestic abuse. As pointed out by Scottish Women’s Aid, however, violence against women is caused by gender inequality, and the cuts in this budget will undermine women’s equality, financial autonomy and safety.

Emma Ritch expands on some of these key issues in this piece in the National and in her appearance on Scotland 2015 last night. Meanwhile, some of the detail that particularly applies to women and to gender equality issues are set out in our ‘gender edit’ of the budget document below (also available as a handy pdf).

Budget 2015: The Gender Edit

Employment (p.42)

While progress has been made in women’s employment, inequalities remain – the female employment rate is around 10 percentage points lower than for men. Much of this relates to childcare […] This Budget confirms that, from September 2017, the free childcare entitlement will be doubled from 15 hours to 30 hours a week for working parents of 3 and 4 year olds.

Other spending measures (p.82)

The government will set up a £3 million fund to encourage innovative approaches including refuge provision to help those suffering from domestic abuse. Ahead of the Spending Review, the government will draw together evidence from frontline professionals to review how services for victims of violence against women and girls are funded and delivered and feed into a refreshed Violence Against Women and Girls strategy in the autumn.

Public sector reform (p.78-79)

Public sector pay: The government will fund public sector workforces for a pay award of 1% for 4 years from 2016-17 onwards.

Welfare (p.87- 89)

Changes to taper rates in tax credits: From April 2016 the taper rate in tax credits will be increased from 41% to 48% of gross income. Once claimants earn above the income threshold in tax credits, their award will be withdrawn at a rate of 48 pence for every extra pound earned.

Changes to tax credits income thresholds and Universal Credit work allowances: From April 2016 the income threshold in tax credits will be reduced from £6,420 to £3,850 per year. Work allowances in Universal Credit will be abolished for non-disabled childless claimants, and reduced to £192 per month for those with housing costs and £397 per month for those without housing costs.

Limit Child Element in tax credits and Universal Credit: The Child Element of tax credits and Universal Credit will no longer be awarded for third and subsequent children born after 6 April 2017. This will also apply to families claiming Universal Credit for the first time after April 2017. Households who have been in receipt of tax credits or Universal Credit, with an interruption of less than 6 months, will be protected. Furthermore, children with disabilities will continue to receive the Disabled Child Element or Severely Disabled Child Element in tax credits and the equivalent in Universal Credit. Multiple births will be protected in both systems. The Department for Work and Pensions and HMRC will develop protections for women who have a third child as the result of rape, or other exceptional circumstances. Consequential changes will be made in Housing Benefit from April 2017.

Income rise disregard in tax credits: From April 2016 the amount by which a claimant’s income can increase in-year compared to their previous year’s income before their award is adjusted (the income rise disregard) will be reduced from £5,000 to £2,500.

Employment and Support Allowance: From April 2017 new claimants of Employment and Support Allowance who are placed in the Work-Related Activity Group will receive the same rate of benefit as those claiming Jobseeker’s Allowance, alongside additional support to help them take steps back to work.

Tax-free childcare: The government reaffirms its commitment to introducing Tax-Free Childcare to support working parents with the costs of childcare. Due to a legal challenge, Tax-Free Childcare will now be launched from early 2017. The government will hold the existing scheme, Employer Supported Childcare, open to new entrants until the new scheme is introduced.

Removing the Family Element in tax credits, the first child premium in Universal Credit and the Family Premium in Housing Benefit: From April 2017, the Family Element in tax credits and the equivalent in Universal Credit will no longer be awarded when a first child is born. This will also apply for families with children making their first claim to Universal Credit. Households who have been in receipt of tax credits or Universal Credit with an interruption of less than 6 months will be protected. Furthermore, children with disabilities will continue to receive the Disabled Child Element or Severely Disabled Child Element in tax credits and the equivalent in Universal Credit. In Housing Benefit, the family premium will be removed for new claims and new births from April 2016.

Extending parent conditionality: From April 2017 parents claiming Universal Credit, including lone parents, will be expected to prepare for work from when their youngest child turns 2, and to look for work when their youngest child turns 3, with support from Jobcentre Plus.

Lowering the household benefit cap: The government will lower the household benefit cap, which caps the amount of benefits out-of-work working-age families can receive, to £20,000, except in Greater London where the cap will be £23,000. The current exemptions to the cap will continue to apply.

Discretionary Housing Payments: The government has set out the level of Discretionary Housing Payment funding that will be made available to Local Authorities in future years. Local Authorities will be able to use this funding to protect the most vulnerable and to support households to adjust to Housing Benefit reforms.

Benefits uprating: Most working-age benefits will be frozen for 4 years from April 2016. This will apply to Jobseekers’ Allowance; Employment and Support Allowance; Income Support; Child Benefit; applicable amounts for Housing Benefit; and Local Housing Allowance rates, with provision for high rent areas. This excludes Maternity Allowance; Statutory Sick Pay; Statutory Maternity Pay; Statutory Paternity Pay; Statutory Shared Parental Pay; and Statutory Adoption Pay; disability, carers and pensioners’ premia in the frozen benefits; the Employment and Support Allowance Support Group component; and other disability, carer and pensioner benefits, which will continue to be uprated in relation to prices or earnings as applicable.

Tax credits uprating: The uprating freeze will extend to the Child Tax Credit and Working Tax Credit (excluding disability elements). All disability elements will continue to be uprated by prices each year.

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Photo credit: The 'LEGO' Budget by Duncan Allan, used under the terms of a Creative Commons license.

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