May Monitor: How will Theresa May’s Government live up to her early promises?
Theresa May became Prime Minister promising ‘a country that works for everyone’. She committed to fight the ‘burning injustice of inequality’, to support those who are ‘just managing’ but find life hard and to prioritise ‘ordinary working class families’ over the wealthy few.
How will the actions of her Government live up to these early promises?
Today the Women’s Budget Group launches the #MayMonitor – an on-going project to track the actions of May’s Government and highlight whether they will help meet these promises. This briefing sets out the Women’s Budget Group’s suggestions for how the Government can turn Theresa May’s commitments into reality.
A country that works for everyone
This includes: a commitment to fight against a series of injustices including lower life expectancy for people living in poverty, institutional racism in the criminal justice system, lower educational outcomes for working class boys, the gap in outcomes between state and private school pupils, the gender pay gap and the lack of support for people with mental health problems.[i]
The May Government has already announced an ‘inequality audit’ to tackle inequalities in public service outcomes. All Government departments are being required to collect and publish outcomes data on key issues such as health, education and employment broken down by ethnicity, gender, income and location. The data will be published annually in order to track improvements and hold public services to account.
The Inequality Audit could help the Government meet its obligations under the Public Sector Equality Duty to have ‘due regard’ to equality in all areas of its work. This is a welcome change of direction from the previous Government, which often described the collection of equality data and action to monitor the equality impact of policies and practices under the PSED as ‘red tape’. The recognition of social class as a significant form of inequality is also welcomed.
The Audit will require a significant transformation in the approach of the Treasury, which has repeatedly failed to publish an equality impact assessment of the Budget or Pre Budget report or examine the impact of Budget announcements on household incomes or living standards. More fundamentally it is difficult to see how the May Government can tackle inequality while continuing with the austerity policies of the previous leadership (see section on the economy below). As such, the Women’s Budget Group calls for an urgent reassessment of fiscal policy.
An economy that works for everyone
This includes: making sure ‘that everyone can share in the country’s wealth’ and dealing with ‘Britain’s long standing productivity problem’
This will be a key challenge for May’s Government. The Women’s Budget Group impact assessment of austerity policies since 2010 has shown that the living standards of the poorest 10% of the population will see a 21% fall by 2020 relative to the baseline of policies in place up to 2010. This is more than five times as much as the relative decline in living standards for the richest 10%. Women are hit harder than men. The hardest hit households, headed by female lone parents and single female pensioners will be around 20% worse off on average in 2020. It is difficult to see how the Government will meet its commitment to tackle the inequalities highlighted in May’s speech if it continues with its austerity policies. The gap in life expectancy for the poorest is unlikely to close if their standard of living continues to decline relative to baseline of policies pre-2010. Gaps in educational outcomes are unlikely to be closed with schools facing a real terms fall in per pupil funding of 8% between 2014/15 and 2019/20. Restoring existing levels of expenditure would seem to be a greater priority than expenditure on further selection in Grammar Schools which have not proved to be effective for children from low income families.
Continued austerity will also make it harder for Theresa May to achieve her aim of improving productivity. The OECD has recognised that fiscal tightening has a negative impact on productivity, employment and economic output. May has committed to greater investment in infrastructure projects. This is welcome, however investment in physical infrastructure (transport, renewable energy, the green economy for example) needs to be combined with investment in social infrastructure (i.e. public services providing care, health, education and training). Modelling by the Women’s Budget Group shows that investing 2% of GDP in the caring sector has the potential to create up to 1.5 million jobs, while the same investment in construction would deliver 750,000 jobs. Given occupational segregation by gender, investment in the social infrastructure would increase female employment and contribute to closing the gender employment gap as well as improve care provision and overall well–being.
Getting tough on corporate irresponsibility
This includes: publishing information on the ratio between CEO’s pay and average company workers’ pay, ensuring that bonuses are paid so that bosses incentives are better aligned with the long term interests of the company, ensuring that both consumers and employees are represented on company boards and cracking down on corporate tax evasion and avoidance
A combination of low pay, casualized and zero hours contracts means that many people in work are earning so little that they cannot meet their living costs. New figures published in September 2016 show that there are now more than 900,000 workers on zero-hours contracts, with 55% of these women. This not only leads to poverty for them and their families (two thirds of children living in poverty in the UK are in a family where at least one parent is in paid work), it also increases the cost of in work benefits. This effectively means that the Government is subsidising poorly paying employers. Any action to address corporate irresponsibility should address poverty pay and zero hours contracts.
Business benefits from the physical and social infrastructure in the UK and has a responsibility to contribute towards it. Cuts to corporation tax introduced by the previous leadership will total £13bn per annum by 2020-21, nearly enough to pay the estimated £14.5bn cost of social care for those with critical needs.
In 2015 only 23% of board members were women. Any strategy to promote employee and consumer representation on company boards must include action to ensure that these boards are gender balanced.
The government I lead will be driven not by the interest of the privileged few, but by yours
This includes: promises that ‘when we pass new laws, we’ll listen not to the mighty but to you’, ‘when it comes to taxes, we’ll prioritise not the wealthy, but you’ and ‘we will do everything we can to give you more control over your lives’
The ‘you’ May addressed when making these promises was ‘ordinary working class’ families. Again these commitments would require a significant change to the policies of the previous leadership where cuts to benefits and services have been introduced alongside tax cuts which have largely benefited the richest, the majority of whom are men. The total cost of all changes to income tax thresholds alone since the 2010 budget is estimated to be around £20.5bn per annum by 2020/21. At the same time there have been cuts to welfare benefits totalling £12bn in this parliament. In effect money has been taken from the poorest, and women, to fund tax cuts for the wealthiest, mainly men.
It is not clear as yet what giving people more control over their lives will mean in practice. The transfer of responsibilities to local councils while withdrawing central government funding and forcing councils to rely on local population and business to finance services was portrayed by the previous leadership as giving people more control over local services. However in practice this policy has meant poorer areas being forced to reduce the provision of local services. This has a disproportionately negative impact on women who are the main users of public services and who often end up having to step in when public services are cut.
The commitment to listen when making new laws is to be welcomed. One way to ensure this is to oblige government departments (and other public bodies) to engage and consult with groups likely to be impacted by new legislation or policy.
The WBG recommends:
- Reverse cuts to public services and social security that have had particularly adverse impacts on women
- Reform plans for Universal Credit
- Invest in social infrastructure
- Improve the terms and conditions of work for the paid work force who staff the social infrastructure
- Increase investment in social housing and in insulating homes
- Strengthen worker’s rights throughout the economy
- Ensure access to affordable care
- Improve support for people – currently mainly women – who provide unpaid care in families and communities
- Create a social security system that aims at fairer sharing of caring and the costs of caring- both between women and men and between families and the wider community; and provides adequate independent income for all over the life course
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[i] Promises are extracted from Theresa May’s speech in Birmingham on 11 July 2016 to formally launch her leadership campaign and her speech outside Downing Street on 13 July 2016 on becoming Prime Minister.