By Dr Eva Neitzert, WBG Head of Development & Co-ordination
It has been extensively documented that women have borne the brunt of austerity and are expected to continue to do so. After the emergency Budget in July 2015, House of Commons library research suggested that £24 billion – or 70 percent – of the additional £34 billion to be raised over the next five years by measures announced in the Budget would come from women’s pockets.
Tomorrow the Chancellor, George Osborne, will deliver the outcome of his Comprehensive Spending Review, in which he has sought a further £20 billion in savings until 2019/2020. It will give us the clearest indication yet of this government’s spending priorities and early signs are that women are again likely to be disproportionately hit by spending cuts.
The most eagerly awaited announcement will be his plans for tax credits. The cuts to tax credits were a central plank of the July budget and set to realise £4.5 billion in savings, with the majority coming from women as the Women’s Budget Group pointed out at the time. The rejection of the cuts by the House of Lords has meant that George Osborne must go back to drawing board.
Yet, his options are limited. The implementation of the Fiscal Charter, which commits the government to delivering an overall budget surplus, and the Welfare Cap, mean that the Chancellor has left himself very little wiggle room. Tax receipts are lower than forecast by the OBR and spending is up, so Osborne will not be rescued by an improved economic context.
As for the Welfare Cap, In July he lowered this in line with the expected savings from tax credits. Now that the House of Lords has rejected those cuts, Osborne either needs to find the savings elsewhere in the welfare budget or return to the House of Commons for a vote to lift the cap. He is unlikely to do the latter, which leaves benefits that are covered by the cap vulnerable. At this stage, it seems housing and disability benefits are the most likely to be raided. The thinktank IPPR has calculated that if housing benefit recipients were required to pay the first 10 percent of their rent, this would net £2.4 billion but leave 4.8 million households worse off by an average £570 per year. Women are again the majority of housing benefit recipients, with women living own their own, with or without children, bearing over 50 percent of the cuts (a further 25 percent of recipients are couple households and around 20 percent are men living on their own, with or without children).
In terms of cuts to other departments, the outlook is not exactly rosy for women either. Analysis by the Resolution Foundation of spending settlements that have already been announced suggest that average cuts of 30 percent will be required from the remaining ‘big 5’. These big 5 include spending on benefits and local government. Women are far more likely to use or be impacted by local government services, particularly those around care, which constitutes a large proportion of local authority spending, and are also far more likely to be employed in local government. So cuts in this area will again hit women harder than men.
Failing to invest in care is also a missed opportunity, both economically and socially. The Women’s Budget Group has repeatedly advocated an alternative economic plan – Plan F – that is centred on investment in the social infrastructure, which includes care services. Such investment to build a caring economy has the potential to not only benefit care recipients – woefully needed at a time when care providers are being forced to close their doors due to underfunding and supply is not able to keep up with demand – but also economic gains, particularly through employment growth. As women make up the vast majority of those in caring jobs, if investment saw these jobs become remunerated at the level of the living wage it would also go some way towards addressing continuing gender gaps in earnings and employment. Investment would need to be centrally funded, rather than through increases in council tax, to ensure that economic inequalities are not entrenched.
While this Spending Review has been characterised by a number of early leaks, the Chancellor is known for his surprise announcements, as with the rise to the national minimum wage in the July budget. The Women’s Budget Group will be meeting to analyse the gender implications of the Spending Review and Autumn Statement. We will issue a press release on the day, as well as a more in-depth response on Monday 7th December. To be the first to receive our response, sign up to the newsletter by joining the WBG and follow us on Twitter. All WBG members are welcome to attend the CSR viewing and you can find full details here.
For advance press enquiries, please contact Eva Neitzert (07908 111 344 / firstname.lastname@example.org)