WBG publishes its full gender impact assessment of the Spring Budget 2017
The Women’s Budget Group today published its comprehensive gender impact assessment of the 2017 Spring Budget.
Key findings are as follows:
- The most significant fiscal announcement, to increase Class 4 National Insurance Contributions for self-employed workers from 9% to 11%, was reversed less than a week after the Budget. Analysis carried out by the WBG shows that, combined with the abolition of Class 2 contributions, this would have raised additional revenue in a progressive way and redistributed from men to women, while the average impact on individual incomes would be limited, even in the richer households. Of the total amount raised by the two measures, women would have contributed just under a quarter.
- The £2 billion over three years announced for social care is welcome, but falls far short of what is needed to address the on-going crisis in social care. The announcement of a Green Paper on social care funding postpones the implementation of sustainable solutions already set out over the last 11 years in two major reports. Women are disproportionately affected by the care crisis. Not only are the majority of those in need of care women, but so too are the majority of those providing paid and unpaid care.
- Women and those on low incomes continue to shoulder by far the greatest burden of tax and benefit changes and cuts to public spending since 2010, with black and Asian women facing a triple disadvantage (see Figure 1, Appendix). Changes due to take effect in April 2017 will continue this trend.
- The Chancellor again chose not to make any significant new investment in health and education services. This is despite creating additional ‘headroom’ by relaxing the government’s self-imposed fiscal rule at the Autumn Statement 2016. It is hard to justify keeping this headroom as a precaution for a future downturn when spending now on public services could instead shore up the economy by creating jobs and stimulating demand.
- The Treasury and Chancellor failed to provide an adequate assessment of how the Budget impacts on different groups. Such analysis must be an essential component of the decision-making process when setting policies that aim to build a country that ‘works for everyone’.
Commenting on the assessment, Dr Eva Neitzert said:
“Despite delivering the Spring Budget on International Women’s Day, there was little here to improve the lives of ordinary women. The additional monies for social care are welcome, but not enough to reverse decades of under-funding that have left the sector in crisis. We know that this affects women disproportionately. Women are the majority of those who provide care and the majority of those who need care.”
“We are also concerned that the Chancellor did not take action to limit the damaging impact of benefit cuts and freezes on the poorest households. Some of these changes, such as the two child limit to tax credits, are due to take effect in April. With rising inflation, these cuts will hit households even harder and their impact will be much more significant than that of raising Class 4 NICs for the better-off self-employed. If the Chancellor and government really want to reduce hardship, we urge them to reconsider these cuts.”
Notes to Editors
- The Women’s Budget Group (WBG) is 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.
- The full assessment is available at: http://wbg.org.uk/analysis/assessments/
Graph 1: 2010-20 cumulative individual impact of changes in taxes and benefits (percentage of net individual income per annum by 2020) by household income groups, gender and ethnicity (selected)
Key to reading Graph 1: By 2020, the cumulative effect of tax and benefit changes since 2010 on Asian women living in the poorest 33% of households will mean that their average individual income will be 19% lower than if the April 2010 tax and benefit system, including any already announced changes, had been carried through to 2020
Table 1: 2010-20 cumulative individual impact of changes in taxes and benefits (real-term £ per annum by 2020) by household income groups, gender and ethnicity (selected)
Key to reading Table 1: By 2020, the cumulative effect of tax and benefit changes since 2010 on Asian women living in the poorest 33% of households will mean that their average individual income will be £2,247 lower than if the April 2010 tax and benefit system, including any already announced changes, had been carried through to 2020