Will women profit from the Budget?
In the pre-election Budget, the Chancellor has presented the British economy as on the cusp of plenty. The Government has passed down some of its savings on spending through various tax cuts and, as taxpayers, women will benefit from this boon.
However, at the Fawcett Society we are disappointed that the broader problems women face have been neglected and fear that the position of women will worsen further. It is great news that the economy is on the path to stability but we call on the Government to ensure that women benefit equally from economic growth and job creation.
We have identified three key areas where women are affected.
More young women than men are not in employment, education or training (so-called Neets) (1) so scrapping national insurance contributions for under 21s and apprentices would be a helpful way of increasing the employment rates of young women.
Yet the Government still appears prepared to tolerate a stark gender divide within apprenticeships, with women overwhelmingly in the lowest paid occupations. For example, in 2012/2013 over 58,000 women took up apprenticeships in health and social care, and almost 25,000 in children’s care, but only 400 took up a position in engineering (2). A truly woman-friendly commitment from the Government would recognise this gendered segregation as a problem and would tackle it.
Women make up the majority of newly self-employed businesses and we welcome the Government’s efforts to help them. However, we fear that the scrapping of Class 2 National Insurance contributions will do nothing to tackle the whopping 40% gender pay gap between self-employed women and men(3).
The Chancellor said the gender pay gap is falling but this is mostly due to a greater fall in men’s wages than in women’s(4). Self-employed wage statistics are also not included in this figure so there is still cause for concern.
We recognise that the introduction of tax relief for social investment will encourage more private investment in women’s charities and social enterprises. However, most of the proposed capital investment is concentrated in sectors with predominantly male workforces, such as construction, energy and STEM research, and we are worried that women will lose out. Hospitals, schools, parks and community facilities are crying out for investment: facilities that women from all walks of life are more likely to use and need(5).
Whilst the announced reforms to the tax system and pensions will help taxpaying women, we are concerned that the Government is neglecting the most disadvantaged women in our society. The increase in the personal tax allowance to £11,000 will not help either the lowest paid or the unwaged, the majority of whom are women (6).
Once again we are most concerned about the £12 billion cut to the welfare budget by 2018. Eighty five per cent of all the cuts so far have come from women’s pockets(7). Even though the severity of future cuts under a Conservative government has been reined in, the lack of detail on this proposal has us worried that women will continue to bear the brunt of austerity (8).
Giving pensioners more flexibility to access their pensions and savings could well increase living standards for millions. However, women have smaller pension pots and are less likely to have pensions than men. They also tend to live longer than men, so it is possible that there could be an increase in the income gap between male and female pensioners (9).
A Budget Without A Rudder
The Chancellor claimed in his Budget speech that the Government has been a success for women, with the smallest pay gap and the largest number of women in work in our history. However, at Fawcett we feel that these victories have been incidental successes. The Government has shown little sign of giving any specific attention to women in the economy, even though so many have been under particular strain over the past five years. It would appear that these pressures look set to continue.
(1) Young Women’s Trust, Young women: The Real Story, 2013
(2) The Changing Labour Market 2: Women, Low Pay, and Gender Equality in the Emerging Recovery – The Fawcett Society https://www.fawcettsociety.org.uk/wp-content/uploads/2014/08/The-Changing-Labour-Market-2.pdf
(4) Response to the Autumn Financial Statement – The Women’s Budget Group: http://wbg.org.uk/wp-content/uploads/2015/01/WBG-AFS-final.pdf
(5) Counting the Cost: How Cuts are Shrinking Women’s Lives – Unison: https://www.unison.org.uk/upload/sharepoint/On%20line%20Catalogue/22422.pdf
(7) House of Commons research quoted in The Independent 6th December 2014 found tax and benefit changes brought in under the Coalition Government have raised £22 billion (85 per cent) from women and £4 billion (15 per cent) from men. Andrew Grice, “Women bear 85% of burden after Coalition’s tax and benefit tweaks”, The Independent, December 6, 2014, accessed March 19th, 2015, http://www.independent.co.uk/news/uk/politics/women-bear-85-of-burden-after-coalitionstax-and-benefit-tweaks-9907143.html.
(9) The Changing Labour Market 2: Women, Low Pay, and Gender Equality in the Emerging Recovery – The Fawcett Society https://www.fawcettsociety.org.uk/wp-content/uploads/2014/08/The-Changing-Labour-Market-2.pdf
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