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How the Budget will affect Women

ResPublica's Kirsty Allan assesses the gender impact of the Budget

Without even mentioning them, the Chancellor’s budget will have an enormous impact on the lives of women up and down the country. Paradoxically, some seemingly positive measures announced in the budget are likely to have negative consequences for certain groups of women. For instance, the Chancellor announced that the income tax threshold will increase from April 2013 to £9,205, a rise of £1,100 from the current rate. This will have a wider impact on low earners and will be of specific help to women as many more of them earn lower salaries than men. However, this will still fail to provide any help to those people, of whom 73% are women, lacking employment or already earning under the threshold. The change to the child benefit withdrawal will leave an extra 75,000 families with a continuing entitlement and now, only those households with an income of over £60,000 will have the benefit removed entirely, whereas households with an income of £50,000 will have the benefit withdrawn incrementally in line with rises in income. Again, this is a welcome measure for women in the squeezed middle but will provide little comfort to those whose income remains steadfastly lower than £50,000 whose benefits will not change.  The Chancellor also discussed the potential need for a further £10 billion cut to the welfare budget by 2016, a factor that is more likely to disproportionately target women due to the fact that benefits routinely make up 20% of a women’s income in comparison to 10% of men’s.   

These measures announced in the budget are likely to exacerbate further the already dire situation of many women. Over the past couple of years women have been particularly badly hit by the coalition cuts in this time of austerity. According to the analysis carried out by the Women’s Budget Group, women currently shoulder 72% of the cuts that were put into place after the 2010 budget. Female unemployment is currently at a staggering 25 year high of 1.12 million, rising at double the rate of male unemployment. The public sector cuts that have been put in place and the subsequent redundancies have affected women disproportionately hard on the basis that 64% of the public sector is made up of women, a higher proportion than in any other part of the economy. This has meant that, for those women still employed by the public sector, the pay freeze has been a further blow to the bank balance.

The effects don’t end there. As the mother is still more likely to be the primary care giver of any children in a family, the slashing of budgets to programmes such as Sure Start and extended schools over recent years and the difficulties that many have in finding affordable childcare means that it is increasingly more cost effective for women not to return to work after the birth of a child. There is even a suggestion that the impact of the wide spread cuts across various sectors are setting women’s equality back by a decade.

What can be done? Gender imbalances like these need to be changed by policy initiatives rather than simply sustained by benefit handouts. However, the advancement of gender impact analyses of current and future policies, a measure already proving to be successful in Sweden would be a welcome initiative, to ensure that future budgets do not have the same unequal impact on the female populous. In the countries that lead on gender equality such as Sweden, social progressivism goes hand in hand with a consonant economic policy. Women need to be more of priority in the minds of the coalition Government insofar as their economic policy is concerned.  Indeed, perhaps the most notable factor about yesterday’s budget was the failure of the Chancellor to discuss or implement any measures to ameliorate the situation of rising and disproportionately high female unemployment.  The socially liberal and progressive rhetoric that has been expounded by the Government may have been better served by extending help with childcare to working women. This has long been a key issue due to its increasingly prohibitive cost. Something that George Osborne was said to be looking into last October was the possibility of introducing fully tax deductible childcare. Making it easier for women to re-enter the job market after having children with initiatives such as this and job share schemes for returning mothers would boost gender equality in real terms, help to limit the need for women to disproportionately rely on state benefits and prevent them from continuing to shoulder the highest proportion of the burden.

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Date Published
24 March 2012

New Economies, Innovative Markets

About The Authors

Kirsty Allan

Kirsty is a former Research Assistant at ResPublica, working within the Models and Partnership workstream. She gradu...