The £8,700 reason the Treasury won’t come clean about the Budget’s gender inequality

Lone parents will see an 18 per cent cut in their living standards by 2020. 

NS

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On Tuesday, the Labour MP Stella Creasy joined a line of feminists who have tried unsuccessfully to make the government publish equality impact assessments of its policies. Under the Public Sector Equality Duty (PSED) the Government has an obligation to have “due regard” to the impact of its policies on equality. But, as campaigners have repeatedly discovered, this isn’t something that it appears keen to do.

Creasy’s amendment would have required the Office for Budget Responsibility to publish a gender equality impact assessment of income tax policy. As the Women’s Budget Group has repeatedly pointed out, tax is a gendered issue. It is the main way we pay for public services and social security, which women rely on more than men, largely because women are more likely to look after others often at the expense of their own incomes.

Since 2010, there have been a series of cuts to income tax, corporation tax and fuel duty that will cost the country £44bn a year by 2020; significantly more than the £37bn saved from cuts to social security over the same period. The main beneficiaries of these tax cuts have been men. At the same time women have been hit hardest by cuts to public services and benefits.

Research by the Women’s Budget Group with the Runnymede Trust published in October this year showed that these cuts are hitting the poorest hardest, with women losing more than men and black and minority ethnic households losing more than white households. The combination of cuts to tax, benefits and public services will mean that by 2020, lone mothers are set to lose an average of more than £8,700 a year, representing 18 per cent of their living standards. The impact on those entitled to benefits or tax credits is even worse. By 2021, black women in this group will be £5,000 a year worse off following years of cuts to benefits and tax credits . The increased National Living Wage and increased personal tax allowance will make little difference. Employed women will lose 10 times from social security cuts as much as they gain from the NWL and tax cuts, while employed black women will lose 12 times as much. And the impact will be significant: employed black and Asian women will lose 20 per cent of their net individual income. 

This is the sort of analysis that the government has repeatedly failed to produce, despite the best efforts of those trying to remind them of their obligations under the PSED. The Women’s Budget Group has called on successive governments to publish an equality impact assessment of the budgety. In 2010, the Fawcett Society even launched a legal challenge against the Treasury.

The Minister for Women, Justine Greening, appears unwilling to put pressure on her colleagues, even if she understands the reasoning behind an assessment. When asked about the equality impact of the budget last week she argued about the principle, but the practicalities. It was hard to measure the impact, she said, without making assumptions about how household wealth was shared. 

Yet there are ways to measure the impact of Budget changes. Greening quoted an Institute for Fiscal Studies report from 2011, but not the conclusion, which suggested there were “simple ways” the government could have shown it was living up to its duties. While it is true that it is difficult to be sure how incomes are shared within households, this does not mean that analysis of individual incomes is not important. We know that household spending decisions are affected by who brings money into the household. We know, for example, that money paid to women is more likely to be spent on children than money paid to men. In addition, while many women with low individual incomes may benefit from the incomes of their male partners, they are vulnerable to financial abuse and at increased risk of poverty if the relationship breaks down, or their partner dies.

Technical debates about how income is shared within households are unlikely to be the real reason behind the government’s refusal to publish impact assessment of its own. It is far more likely that such an assessment would show that austerity policies have hit the poor harder than the rich, women harder than men and BME households harder than white households. At the same time, as the assessment Stella Creasy was pushing for would have shown, tax cuts have largely benefited richer men.

Theresa May said recently that the government wanted to shine a light on difficult truths about inequality. This is one such truth – successive budgets have cut spending on benefits and services while giving away billions in tax cuts. It shouldn’t be up to small voluntary organisations to shine a light on this, the government should meet its legal obligations and do this analysis itself. 

Dr Mary-Ann Stephenson is the co-director of the UK Women’s Budget Group