2015 Summer Budget: Full Budget Analysis

For a full budget analysis see here.

A budget that undermines women’s security

A further £13bn slashed from an already depleted social security budget will undermine the security of women and drive poor families deeper into poverty. This is one of several policies outlined by the newly-elected Conservative government in the summer budget delivered on 8th July.

The Chancellor George Osborne wants to deliver a budget surplus by 2019/20. To that end he published a fiscal charter committing this and future governments to maintaining a budget surplus even during times of economic stability and growth.

Yet maintaining a surplus in itself isn’t the key to economic security and limits the sharing of risk through public investment in social and physical infrastructure. The fiscal charter and the measures announced in this and all budgets since 2010 simply shift social risks further away from collective sharing and onto individuals, in particular women. The result will be increased personal debt, a rise in maternal poverty and greater care burdens on women.

Key points raised in the Women’s Budget Group budget analysis:

• The £13bn of cuts in social security spending by 2020/21 will disproportionately hit families and women on low incomes, and the rise in the minimum wage won’t compensate this. Instead the cuts in working tax credits will decrease work incentives for second earners and widen the gap between benefit recipients and the rest of the population.
• Included in the £13bn cut to security is a reduction in the benefit cap to £23K in London and £20K elsewhere. This is going to force more families into debt and rent arrears, many will be forced to leave homes where they have community networks and jobs, and it will disrupt the lives of the poorest children. The House of Commons Library reports that four-fifths of those adults affected by the cap in 2014 were women, many of whom had several children.
• Raising taxation is welcome, including cuts in pension tax relief. However, such measures are partly offset by continued give-aways including: the poorly-targeted and expensive rise in personal tax allowance, the continued freeze in fuel duties and further cuts to corporation tax rates, all of which benefit mostly men as they are more likely higher-income earners and/or shareholders.
• Any increase in high quality childcare services is welcome; the pledge of 30 hours a week free childcare for all 3-4 year-olds is a step in the right direction. However, the policy is restricted to children whose parents are in paid employment. There is little detail on how much the government will spend. If no extra funding is available the policy will simply compound existing problems in childcare provision such as the structural public underfunding of childcare, low availability of childcare places and quality issues.
• The pay rise cap for public sector workers, combined with further cuts in departmental spending yet to be announced, will again affect women disproportionately and threaten employment retention and quality of public services.

The impact of these latest measures discussed in detail below must be judged alongside the austerity programme implemented over the last five years. The Women’s Budget Group has conducted detailed analysis of every budget, spending review and key policies (such as universal credit) for the implications for women and gender equality.

For a full budget analysis see here.