Tell the new Prime Minister: tax cuts turn back the clock on gender equality
Date Posted: Tuesday 25th June 2019
While Boris Johnson and Jeremy Hunt compete over which of them can best deliver Brexit they are both agreed on one thing: the need to put more money in the wallets of better off men by cutting taxes.
Boris Johnson has said he would increase the threshold for the higher rate of income tax from £50,000 to £80,000 and abolish national insurance from the first £1000 of workers’ monthly pay-check. Jeremy Hunt has also pledged NI contributions on the first £1000 of earnings and at the same time to cut cuts to corporation tax from 19% to as little as 12.5% as well as exempt hundreds of thousands of firms from business rates.
These tax cuts would come on top of a series of tax cuts since 2010 which will cost the UK £47bn a year by 2021/22. We have seen cuts in fuel and alcohol duties (costing £10bn a year), cuts to corporation tax rates (£13bn a year) and the raising income tax and NICs thresholds (£24bn a year). All of these have benefited men and higher income taxpayers disproportionately.
The new tax commitments made by Boris Johnson and Jeremy Hunt will also disproportionately benefit men. Analysis by the New Economics Foundation has shown that increasing the threshold for national insurance contributions to £1000 a month would cost £8.2bn per year. The richest 20% of families would be better off by £560 while the poorest 20% would gain just £80. Those earning less than the current NI threshold (£8,632), the majority of whom are women, will gain nothing. Increasing tax credits/universal credit would be a far better way to lift the income of the poorest families.
Increasing the threshold for higher rate tax would cost £9bn a year. This will only benefit high earners, the vast majority of which are men (73% of higher rate tax payers are men). The main beneficiaries would be people (mainly men) in the top 10% of earners, who would gain nearly £2,500 a year on average.
Corporation tax has already been cut from 28% to 19% since 2010. It is due to fall to 17% by 2020. An additional cut to 12.5% would cost £14bn a year. Again, the majority of beneficiaries would be men who make up the majority of business owners, executives and shareholders
But the gender impact of tax cuts isn’t just about who gains. It is also about how else this money could be spent. These cuts come at a time when public services are in crisis after a decade of cuts to public spending. The proposed tax cuts will not only largely benefit men, they will hit women, because tax is one of the main ways we fund spending on public services and social security, on which women are more likely to rely.
Women still do most of the unpaid care work involved in bringing up children or caring for the elderly. They are also, on average, poorer than men. This means that they rely more on public services such as social care, childcare, public transport, and healthcare to support their lives so that they can still acquire income through paid work. When these services are cut it is women who plug the gap with their unpaid labour making them in turn poorer and reinforcing the gendered division of labour. We have already seen how cuts since 2010 have hit women particularly economically disadvantaged and BAME women hardest.
The £22.2bn a year promised by Hunt or the £17bn promised by Johnson would be far better spent starting to address the crisis in public services or restoring some of the lost value of social security. These tax commitments that will put more money in the wallets of the richest men, while the purses of the poorest women are still being hit by austerity.
You can read more on tax and gender in our briefing here.