Autumn Financial Statement: a missed opportunity for women, the low paid and the economy
Commenting on the 2014 Autumn Financial Statement, Dr Eva Neitzert, Deputy CEO of the Fawcett Society, noted:
“Today’s Autumn Financial Statement was the last major opportunity for the Coalition Government to set out a path for tackling Britain’s low wage economy, but it has failed to deliver for women and those on low incomes.
“The Chancellor’s assertion that the Coalition is presiding over an ‘economy that works for all’, will not ring true for the 1 in 4 female employees now in low paid work.
“The recovery – which has been fuelled by growth in low wage, temporary and insecure work – is not only bad for those entering work who often simply end up in a different kind of poverty, but also for the economy as a whole, impacting tax receipts and leaving the State topping-up poverty wages with in-work benefits.
“We are concerned that today’s announcements risk increasing hardship for those on the lowest income – 66 per cent of whom are women – and will do little to ensure that the recovery delivers quality jobs that pay a living wage.
On further benefit freezes:
“We are particularly concerned by the further year-long freeze on the Universal Credit Work Allowance and by the Chancellor’s stated desire to freeze working age benefits for 2 years. On average benefits make up twice as much of women’s income than men’s, largely due to their caring responsibilities and relative poverty, and as such women will feel this measure disproportionately. Previous across-the-board raids have hit women working age benefits twice as hard as men with 66 per cent of savings coming from women’s pockets.
“We know those on the lowest incomes are feeling the cost of living crisis sharply, with the number of people accessing emergency rations at foodbanks rising from 128,000 in 2011-12 to 913,000 in 2013-14. [i]
On further cuts to public sector spending:
“On top of this, public sector spending is once again in the firing line with the Chancellor committing to instate an additional £13.6bn worth of cuts to departmental spending in 2015-16.
“This will yet again be devastating for women as they tend to rely more on public services, such as child and social care services, due to the fact they both tend have greater responsibilities and lower earnings and assets.
“Whilst the Chancellor has provided assurances that these deep cuts will not harm front line services it is not clear how this can be achieved. The public sector is suffering from the deepest cuts enacted in peacetime history and many front lines services have already been devastated. Since 2010, 285 children’s centres have closed or merged, 159 community centres have been lost and over one million street lights are now switched off or dimmed for a set period overnight. As a result, over a third of women feel more cut off from their community, a third are using local services less and 85% of women report they feel less safe at night.[ii]
“In addition, further cuts to public sector pay will hit women twice as hard as men as they make up two-thirds of the overall workforces, and even higher numbers in certain sectors such as local government.
On physical infrastructure investment:
“The Chancellor has announced £5.9bn in science and £15bn in road building. While this investment is welcome it is vital that we ensure women benefit from this investment and we are disappointed that there are no accompanying measures to increase the current woeful underrepresentation of women in construction and engineering.
“Women make up only 1 per cent of apprentices in the highest paid apprentice industries – electro-technical and construction, and 91 per cent in the lowest paid sectors of hairdressing and social care. It is no surprise then that gender pay gap stands at 21 per cent for apprentices.[iii] Investment in apprenticeships without addressing the lack of women in science, technology, engineering and maths (STEM) will only perpetuate women’s unequal footing in the labour market.
On increased tax on banks and for multinationals moving profits offshore:
“We welcome the announcement that banks will pay more towards balancing the budget, with a limit imposed on the amount of bank profits that can be offset, and the 25 per cent tax on multinationals who shift profits offshore. These measures collectively are projected to raise £5bn over five years and will make an important contribution to making sure that everyone pays a fair share. This is important as up until now 79 per cent of savings from benefits and tax credits have come from women’s pockets. [iv]
On measures to further gender equality:
“Given that the gender pay gap still stands at 17.6 per cent, which is in no small part down to the fact that two thirds of those on low pay are women, we had hoped to see an Autumn Statement that addressed the issue of low pay head on. Recent research – carried out by Landman Economics and commissioned by the Fawcett Society – found that lifting the national minimum wage (currently £6.60 per hour) to the Living Wage (£7.65 nationally, £8.80 in London) would immediately reduce the gender pay gap by 0.8 per cent and lift the pay of nearly 1 million more women than men.
“While the Chancellor was keen to promote investment in STEM, construction, and extractives, these are all industries that are heavily dominated by men. We would have liked to have seen greater investment in the care economy – not just because women predominate in the industry in jobs that are typically low paid and undervalued, but also because women do the majority of unpaid care work. A greater supply of quality, affordable care would allow more women to move into work, and would allow those working fewer hours to juggle their caring responsibilities to take on more hours of paid work should they so wish.
[ii] Counting the cost how cuts are shrinking women’s lives, UNISON, 2014
[iv] Reported by Andrew Grice in The Independent, 8 March 2014.
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