From the TUC

JAM tomorrow? Not much in the Autumn Statement for those Just About Managing

23 Nov 2016, by Guest in Economics

In the last few days the press has been full of claims that this afternoon’s autumn financial statement would be all about the ‘just about managing’. This was the first chance for the new Conservative leadership to show how they would build an ‘economy that works for everyone’ and to turn Theresa May’s commitment to be on the side of working class families rather than the wealthy into reality.

At the Women’s Budget Group we were hoping that this might mean a move away from austerity policies that have hit women and the poorest people hardest. Taken together the changes since the 2010 Emergency Budget will lead to some of the poorest women losing 15% of their individual income (a cut of just over £2000 a year) by 2020. When cuts to services are added in the impact is still more drastic. Single mothers for example will lose the equivalent of £9000 as a result of changes to taxes, cash benefits and the value of public services. This translates as a 20% cut in living standards by 2020 compared to if the policies in place in March 2010 had continued.

We hoped to see action to tackle the crisis in care services. By 2013 one million people, mostly older women, were not getting the help they need. Women are more likely to give up their time, and in many cases their hours of employment (perhaps their jobs entirely) to care when care services are not available. This hurts their future employment prospects and damages the economy through lost productivity. The crisis in social care is also impacting on the NHS, with some people who would get no care at home at least getting some from NHS. But this is expensive, inefficient and not what they or anyone else would want. This means NHS is unable to do what is needed for other people and lengthens waiting times.

We hoped for policies that would address the growing problem of low pay and zero hours contracts, which, combined with increasing housing costs, has pushed many people into poverty.

Sadly what we saw isn’t likely to make life easier for the women who are just about managing. The taper for universal credit (the amount of universal credit that is lost for every pound earned) was cut from 65p in the pound to 63p. For someone working full time on the national minimum wage this will be worth about £250 a year, a fraction of the amount lost from previously announced cuts to universal credit. The national minimum wage will be raised to £7.50 per hour. This is still lower than the real living wage of £8.45 an hour (£9.75 in London). There will be an investment of £1.4 bn to support the building of 40,000 affordable homes. This falls far short of the house building needed to address the housing crisis and does not help those in greatest housing need, the majority of whom are women. Furthermore just as the Government’s ‘living wage’ isn’t actually enough to live on, their version of ‘affordable housing’ is housing that costs 80% of market rates, which in many parts of the country is out of reach for the vast majority.

At the same time the increase in the personal tax allowance does nothing to benefit those who are earning too little to pay income tax (65% of whom are women). And raising the 40p tax threshold will mainly benefit men, who make up 72% of higher rate tax payers. Taken together the changes to income tax since 2010 will cost the economy £16bn a year.

Theresa May described austerity today as simply ‘living within your means’. In reality it is a political choice to cut the benefits and services which are largely relied on by women while introducing tax cuts which will largely benefit men.