The Fawcett Society are taking their legal challenge against the Budget to the High Court. Yvette Cooper has released research showing two-thirds of tax rises and benefit cuts will hit women.
As the Fawcett Society takes their legal challenge against the Emergency Budget to the High Court, Labour’s equalities spokeswoman, Yvette Cooper MP, has released research detailing exactly how disproportionately the cuts will affect women. The findings may form part of the evidence if the High Court agrees to a full judicial review.
The research, undertaken by the House of Commons Library, calculates that the Emergency Budget will hit women almost three times as hard as men, and the Spending Review, twice as hard. Of the £16bn set to be raised in direct tax, benefit, and pension changes in the Budget and Spending Review, £11bn will come from women, it finds. Overall, of the £8.5bn additional tax credit and welfare savings and public sector pension contributions raised in the Spending Review, £5.7bn will come from women.
The research sets out how the cuts will affect working women (those with children in particular), carers (who are most likely to be women), and women nearing pension age.
Women with children
Over £6 billion is being cut in direct financial support for children in the spending review and Budget, to put it in context, this is three times as much as is being taken from the banks.
The analysis calculates these figures by using figures which show the proportion of benefits paid directly to women:
– 70% of tax credits
– 60% of housing benefit
– 94% of child benefit
– 65% of those contributing to public sector pensions are women
– 65% of those affected by the cuts to pension credit for people with savings are women.
Cooper’s research sets out how cutting state support will make it harder for mothers to work. The most significant cut of all is a 10% cut in the childcare element of the working tax credit. According to the Daycare Trust this amounts to up to staggering £1,500 a year cut in help with child care costs.
Changes to working tax credits only serves to compound these problems. Currently, if one partner loses his job and the other is in part time work, they can get up to £70 a week in Working Tax Credit to help them. Now working tax credit is being abolished, unless a couple are working 24 hours between them. Given the costs of travel and childcare, this means that some families will be better off if both partners give up work than if one of them gets a part time job.
Stay at home mums will be hit by cuts to child benefit for higher rate tax payers. A one earner couple on £45,000 with three children loses £2,450 a year in child benefit (in most cases this is currently paid directly to the mother). In contrast, a two earner couple on combined income of £80,000 keep their child benefit.
Moreover, cuts to the baby tax credit, amounting to £545 being cut from the family budget mean that new mums will have to return to work sooner.
Cuts to jobs
These changes are compounded by fact that women are more likely to lose their jobs as, due to cuts in the budget, over 300,000 jobs are earmarked for cuts in the public sector alone, where a large proportion of the jobs are done by women (65% of public sector jobs are done by women.
Cuts to pensions
Older women will be more heavily hit by cuts to the pension credit, public sector pensions, attendance allowance, and carers’ allowance. Women who are currently 57 will have to work longer than they expected, losing on average over £400 a month in State Retirement pension for every extra month they are expected to work (based on £5,000 a year state pension).
Women are also more likely to be hit by the cuts in the Pension Credit Savings Credit which means that pensioners with more savings will no longer be able to get Pension Credit, Housing Benefit or council tax benefit.
Cuts to local services
On top of all these cuts to direct financial support from the state, women are more likely to be hit by cuts in local services upon which they are heavily reliant, particularly social care which will be affected by the 27% cut in local council budget
In support of this research, The Women’s Budget Group – a network of authoritative, independent experts, has also said that the Spending Review will impact disproportionately on women’s incomes, jobs and public services. Its research finds that women often act as ‘shock absorbers’ as they try to shield their children from the effects of poverty. Women can only bear so much shock – as these cuts begin to bite, it is highly probable that it is families who will suffer most.