#Budget2016: Women and low income households again bearing the brunt of austerity
Last weekend the Women’s Budget Group published a cumulative assessment of ten years of austerity, covering both the Coalition government (2010-15) and the policies announced thus far by the Conservative government that took office in May 2015.
The findings of the research could not have been starker: the ten percent lowest income households will experience a drop in annual living standards of 23% by 2020, while the richest 10% see their living standards fall by only 5%.
Cumulative impact of tax/benefit and spending cuts as % of living standards by household income decile groups (2010-20)
Source: Author’s calculations using Landman Economics tax/benefit and public spending microsimulation models.
With women making up the majority of those on low incomes, it is not surprising that female-headed households are the worst affected. By 2020, female lone parents and single female pensioners will experience the greatest drop in annual living standards, on average around 20%.
Today’s Budget will provide no comfort to those who have borne the brunt of austerity. The Chancellor has cut taxes for corporations and lifted the threshold for the 40p income tax – both measures that will predominantly benefit men – while making cuts to essential services and to benefits for people with disabilities.
He has again failed to invest in the social infrastructure – the health, education and care services we all depend on to lead healthy and secure lives. This is despite the fact that even international institutions, including the OECD, are now calling for rich countries to ease up on austerity.
Our research shows that investing in the social infrastructure makes good economic sense, as well as delivering better social outcomes and promoting gender equality. Modelling carried out by the Women’s Budget Group on behalf of the ITUC found that investing 2% of GDP in care will create twice as many jobs as the same investment in construction, and has greater economic benefits than continued austerity. It would also also raise women’s employment by 5 percentage points, thereby helping to close the gender employment gap.
Much was made by the Chancellor of the incentives to encourage saving. Given their lower incomes, women have struggled to save. It seems unrealistic to expect this to change at a time when evictions are at record levels and personal debt is rising as people struggle pay for basic living costs.
We were again disappointed that the government has failed to carry out an adequate impact assessment of the Budget. This is essential for understanding how policy-making is affecting different households and is essential for the government to fulfil its requirements under the Equality Duty.
Far from being a Budget for the ‘next generation’, the measures announced today risk condemning many more to a life of insecurity as the public services and social security system is further eroded.