UK Budget Assessments
WBG’s response to the Chancellor’s statement 17 Oct 2022
Date Posted: Monday 17th October 2022
A healthy economy needs a healthy population: The Women’s Budget Group warns against austerity, calling for vision and imagination to address the economic and energy crises
Responding to the Chancellor’s statement today, Mary-Ann Stephenson, CEO said:
“The Chancellor may hope his announcement today buys this Government some time, but he just poured uncertainty and fear over most ordinary people struggling to budget month to month as their outgoings increase while their incomes continue to fall in real terms, and will at the same damage the economy he was trying to ‘stabilise’.
Liz Truss’s vision for a low tax economy was always going to inflict economic pain on those on the lowest incomes and widen inequality, including gender inequality and ran counter to public opinion. A majority of the public are in favour of paying taxes if it means better public services.
In that context the U-turn on the planned tax cuts is welcome, but Jeremy Hunt is no safe pair of hands for the economy, equality or the planet. Not only has he thrown uncertainty over households’ and businesses’ ability to plan for or pay their energy bill from Spring, he is also promising a return to austerity measures, calling on all Government departments to find savings and warning of further cuts.
Austerity was the wrong response to the 2008 global recession and it is the wrong response to the aftermath of a global pandemic and a global energy crisis.
We need to get the fundamentals of the economy right: a healthy economy needs a healthy and educated workforce, children going to a local nursery or school having eaten a decent breakfast, safe and affordable homes. That means investing in public services, support for those on the lowest incomes, energy support and insulation programmes.“
Failed experiments of austerity
Research published earlier this month evidenced the impact of austerity policies on more than 330,000 excess deaths between 2012 and 2019 – linked to lower income, poor health and housing, and social isolation. Austerity has disproportionately impacted the poorest families and widened inequality, with Black and Asian households facing a drop in living standards of 19.2% and 20.1% respectively and lone mothers seeing an average drop in living standards of 18%. Disabled women lost 13% of their annual net income by 2021 from cumulative tax-benefit changes.
Not only that, but austerity measures left our vital social infrastructure severely weakened in the face of a global pandemic from which we are still recovering. There are now seven million people on NHS waiting lists for elective care in England. In the year to 31 March 2022, there was a net loss of around 4,000 childcare providers, the largest decline since 2015-16. The number of people out of work due to poor health has increased by 4 percentage points between August 2019 and August 2022. This is not the time for more cuts.
Energy price u-turn
The announcement that the Government will now only guarantee the energy price cap until April next year has left households and businesses with complete uncertainty and there are concerns energy bills could increase by thousands, while living costs are spiralling and income is falling.
The Government urgently needs to follow up with details to address the current energy crisis and support individuals and families to pay their bills, while taking us into a sustainable path to reduce energy consumption and move away from fossil fuels.
Vision for the economy
We need a vision with the ambition to address the scale of the issues we are facing and a plan to bring stability and assurance to households and businesses. That includes a large-scale investment in public services to support the health of the economy by increasing the population’s physical and mental health and wellbeing, which would increase tax revenues and reduce welfare costs.
The energy crisis and climate emergency can only be solved in the long-term through investment in renewable energy, retrofitting homes and buildings and higher energy efficiency and zero-carbon targets for new builds.
The Women’s Budget is calling for:
- A windfall tax on excess energy profits, with a removal of deductions and subsidies to oil and gas producers.
- Targeted support for energy costs that would incentivise reduced consumption through variable tariffs and social security for people with higher demand – like disabled people and low-income large families.
- A tax on wealth to fund investments, recognising that during the pandemic the wealthy saved money while the poorest spiralled further into further debt.
- Investment in retrofitting homes, to reduce energy costs;
- Investment in public transport, particularly in rural areas, to reduce transport and fuel costs;
- Investment in social housing, to reduce housing costs;
- Investment in social infrastructure, particularly care services, to support people with care needs and build the foundations of a healthy economy.
- Confirm social security benefits are increased in line with inflation
About the Women’s Budget Group
The Women’s Budget Group is an independent network of leading academic researchers, policy experts and campaigners. Our vision is of a caring economy that promotes equality between women and men.
For more information or further comment, contact
Erin Mansell, Head of Communications and Public Affairs: firstname.lastname@example.org
 D. Walsh, R.Dundas, G.McCartney, M.Gibson and R.Seaman (2022) Bearing the burden of austerity: how do changing mortality rates in the UK compare between men and women?
 Ofsted (2022) Childcare providers and inspections as at 31 March 2022