A Gender Impact Assessment of the Coalition Government Budget, June 2010

You can read the full budget analysis here.

Fairness: the budget fails the gender equality test

Executive summary

We welcome the emphasis that the coalition government has given in the budget speech and budget statement to the importance of fairness. But the government has failed to recognize that fairness has many dimensions- it is not just a matter of comparing the impact of the budget on rich and poor households, but also on women and men, in different age groups, ethnic groups and regions.

There is now a Gender Equality Duty that requires public authorities to be proactive in eliminating gender discrimination and promoting equality of opportunity between women and men. The Gender Equality Duty applies to all public bodies, from central government to local government to service delivery partners. It applies to taxation, the benefits system and to public services. There is thus a positive duty to examine the impact of the budget (and the spending review) on women as compared to men. We are disappointed that the government has not complied with this duty and urge the government to prepare a gender impact assessment of the budget as soon as possible.

The government has provided, in Annex A of the budget statement, an analysis of the impact of tax and welfare benefit changes on households with different levels of income – an analysis revealed to be seriously misleading by the Institute of Fiscal Studies (IFS). The IFS which showed that the budget measures were not as the government claimed, ones from which the rich will feel more pain than the poor, and described them more accurately as “regressive”1 . But no attempt was made by the government, or the Institute for Fiscal Studies, to analyze the impact on the individual incomes of women and men. In households with more than one earner, individual incomes matter because they affect the bargaining power that women and men bring to household decision-making. There is convincing evidence that women and men do not always pool all their income and share it equally.2 As the Report of the National Equality Panel noted ‘Gender inequalities are largely masked when incomes are measured on a household basis’.

A government committed to gender equality would try to use budgets as a way of offsetting the gender inequality that exists in markets, businesses, families and communities:

• median annual earnings for men who work full time are £25,800, but for women only £20,100
• men are more than three times as likely to be in the top tenth of earners as women
• many women are part-time workers, who average hourly pay is 39% below those of full-time men
• even after taxes and benefits, in the mid years of the last decade, median individual income for men was £281 per week, while for women it was less than two-thirds of this, at £180 per week
• women continue to do more unpaid work than men, 4 hours 15 minutes for the average women on the average day, as compared to 2 hours 18 minutes for the average man on the average day.

We welcome the pioneering assessment of the impact of the budget on the incomes of women and men, conducted by the House of Commons library, at the request of MP Yvette Cooper. It analyses the distribution between women and men of the £8 billion raised by the budget changes in direct taxes and benefits, and finds that £5.8 billion will be paid by women and only £2.2 billion by men.9 This will only exacerbate existing inequalities of income between men and women. This is not surprising because a larger share of women’s income is made up of benefits and tax credits – on average one-fifth for women compared to one-tenth for men – and more women than men earn too little to benefit from the change in income tax thresholds.

You can read the full budget analysis here.