WBG’s response to the Autumn Statement 2022: The budget means real terms cuts to public services that will hurt people and the economy
Date Posted: Thursday 17th November 2022
Responding to the measures announced in the Chancellor’s Autumn Statement, Mary-Stephenson, Director of the Women’s Budget Group said,
“The budget announced today means a real terms cut to public services on which we all rely over the next two years, at a time when we can least afford it. Of the small increases included in the Chancellor’s statement, most are delayed until 2025 and even then the projected net increases in education, health and social care are below what is needed to address the scale of the challenge in these sectors. Yet it is investment in public services that is needed to strengthen the economy now.
“Our public services have been damaged by austerity policies since 2010 and have yet to recover from the impacts of the pandemic. Further real terms cuts announced today will have a devastating impact not only on the people using services and those working in them, but will further undermine the economy.
“This is a mistaken response to the economic challenges we are facing. The Office for Budget Responsibility is forecasting a 7% fall in living standards over the next two years. A healthy economy needs a healthy, well cared for and educated population.
“A straining NHS means there are record numbers of people on NHS waiting lists and 2.5 million people who are now economically inactive due to long-term illness – people whose contributions we are missing from the economy as well as the distress and cost caused to them and their loved ones.
“Social care is at breaking point, with Conservative Council Leaders warning of a £3.7bn funding shortfall, and while additional commitments to spending on social care are welcome, they fall far short of what is needed.
“We now have 2.6 million people with unmet care needs, and women are often the providers of last resort stepping in, to the detriment of their own incomes, health and economic contributions. There are 1.4 million women who are out of the workforce because they are looking after their families.
“The Chancellor announced a Government review of the causes of rising levels of economic inactivity, which have now reached 3.5 million people but overlooked one of the biggest reasons for women being unable to work or work more hours, which is the crisis in the childcare sector.
“Over 4.5 million women are estimated to be unable to secure a job or increase their working hours due to unavailable or unsuitable childcare options – meanwhile we have lost over 4,000 childcare providers in the year to 2022. And yet there was nothing for early years providers in today’s statement!
“The combination of real terms cuts announced today are likely to worsen the health of the population and the economy, and it is those who are already on the margins who will be most impacted.
“The first dose of austerity saw cuts of over £80 billion to public services and social security between 2010 and 2020, hitting low-income and single parents, black and ethnic minority ethnic women and disabled women hardest. They can ill afford to bear the brunt of austerity 2.0. This is why it is so frustrating that no Equality Impact Statement was published with the documentation.
“We welcome measures to support the most vulnerable, including increasing benefits and the national living wage, as we had warned that cutting social security would push 112,000 lone parents and 200,000 children into poverty. However, this does nothing to restore the money cut from benefits since 2010, which has resulted in spiralling levels of poverty.
“We also welcome the triple lock on pensions being maintained, which benefits women reliant on state pension having provided unpaid care during their working lives.
“We were pleased to see more targeted cost of living payment support for the poorest households on top of the broad measure to help families with their energy bills. Time will tell whether this is enough and the Government must be ready to step in again if needed.
“We welcome the announcement of an Energy Efficiency Taskforce to reduce energy consumption, which is much needed for our bills and for the climate, but delaying the funding until 2025 belies the urgency of both.
“Taxes are a necessary function of a healthy economy and population, and we welcome measures to increase the Windfall tax. However, in the menu of options available to the Government, it is unfortunate that the balance did not tip more to those who can most afford it. We would have liked to have seen greater taxes on wealth – and income made from wealth – rather than freezing thresholds so that low and middle-income households will see more disappear from their pay packets.”
The Women’s Budget Group are calling for:
Measures to support the most vulnerable:
- the abolition of the benefits cap and the two-child limit.
- the conversion of Universal Credit advances into non-repayable grants.
- increases in ESA, Jobseekers’ Allowance and Statutory Sick Pay.
- an increase in Child Benefit to £50.
- and an end to the ‘No recourse to public funds’ condition, which excludes many migrant women from support.
To put the foundations of the economy on a stable footing:
- Invest in social infrastructure, working towards free universal childcare, available from when children are 6 months old.
- And working towards a free universal quality social care system.
- Return funding for other public sectors to pre-2010 levels in real terms
To reduce energy consumption and costs in the medium term, to stimulate the economy, and to address the dual energy and climate crises, we also need to see:
- Government investment in retrofitting of homes and non-domestic buildings beginning now, including financing insulation efforts and greening of home heating systems (such as heat pump installation), with specific support to social and private renters.
- Targeted support to incentivise reduced consumption including variable tariffs with a subsidies basic allowance and higher rates per additional unit.
- Public ownership of the energy sector for a Green and Caring Economy, including through a state-owned renewable energy company that would set attractive tariffs for consumers and invest in renewable energy, following the example of most other European countries.
- Reform wholesale energy market pricing, to decouple price of electricity from the gas price (the highest unit cost of production at the moment) and so encourage consumers to move to renewable energy suppliers.
- Remove the tax reliefs and allowances that oil and gas companies like Shell and BP are allowed to claim. The additional tax revenue to be used to lower prices in the short term and support investment in renewables and insulation.