As Socialist Economic Bulletin has pointed out previously, the June Budget, far from being ‘fair’, will attack the poorest in society. But even this it will not do evenly. The Budget will deepen further discrimination and inequality, and will do so increasingly across the lifetime of this government.
Daily, new reports appear of the devastation that will be wreaked by the Budget as rights and equality organisations begin to tabulate its impact. Just one example is the impact on housing as a result of the cap on housing benefit, the pegging of benefit to the lowest third of rents in an area and other changes. The National Housing Federation estimates up to 750,000 in the South East of England will lose their homes.. Many others will be forced to relocate to cheaper areas, uprooting lives, losing jobs and effecting a form of social engineering.
In each of these policy areas affected by the Budget, social inequality – between women and men, of disabled people, of black people and others – will deepen because these are the groups that already predominate among the poorest. Forty per cent of lone parent families (mostly headed by women) are in the bottom fifth by income; disabled people (if they overcome the barrier of employment discrimination) are much more likely to be lower paid than their non-disabled peers and they are much more likely to depend on social housing; among all employees median hourly pay for women is still 21 per cent less than for men; being black continues to mean being more likely to be unable to find a job and much more so for some groups.
Women and disabled people will be hit hard by specific changes and that is what this article examines. Using a House of Commons library analysis Yvette Cooper has highlighted, that more than 70 per cent of the revenue raised from direct tax and benefit changes is to come from female taxpayers. Disabled people will be hit by the attack on Disability Living Allowance (DLA). But this is the tip of the iceberg. The social groups over-represented at the bottom end of the income and wealth spectrum – including black communities, older people and the young – will all be particularly hit
The Budget’s emphasis on public sector and welfare benefits cuts and on regressive taxation makes this inevitable. The reality of inequality is itself reflected in the detailed statistics on who works in the public sector and what particular jobs they work in, who most relies on the services that are to be cut and whose lives depend on the benefits that are to be cut. By placing emphasis on cutting public sector spending, the Budget will inevitably deepen inequality and disadvantage.
But this Budget also went out of its way to attack those already facing entrenched discrimination and inequality.
With regard to public sector jobs, initial estimates suggested up to 600,000 jobs will be directly cut in the public sector, and a similar number in the private sector as a result of public spending cuts. This will disproportionately impact on women: 65 per cent of those employed in the public sector are women while a total of 40 per cent of women in employment work in the public sector compared to 15 per cent of men. Women work more in the public sector in large part because of the gender segregated nature of employment: health, education, social work and other jobs that mirror the gender division of labour and caring in the traditional family, along with a wide range of (lower paid) clerical and administrative posts, account for large numbers of the jobs occupied by women.
As the TUC has pointed out, public sector job cuts will not only just disproportionately impact on women directly as workers. Relatively more generous pension provision in the public sector combined with the large number of women who work there mitigates the levels of poverty among older women, for example - poverty in retirement would be much greater otherwise, and is therefore set to intensify as a result of job losses and the kinds of reduction in the public sector envisioned by the Budget. The wider social impact is likely to be compounded by other factors: the five regions with the highest male unemployment rate are also regions with particularly high women’s public sector employment.
The other impact of public sector cuts will be via service cuts. The scale of these – and linked to the NHS and education restructuring intended – will affect the whole fabric of society. But those at the bottom end of the income scale will feel the need greatest: if you have a lower income you are more likely to experience ill-health, be female, be older or be black; if you are lower income and a health, social care or other service is cut, you are much less likely to be able to replace the loss by private provision. As women, black people and disabled people are disproportionately more likely to live in poverty, or to be at the lower end of the income scale, cuts in public services will entrench inequality.
The realities of women’s social gender role and the unequal gender division of labour in households means that public service cuts will disproportionately hit women as unpaid providers of care. Increased labour market participation has done little to prompt men to take more equal share of household labour: while women spend an average three hours a day on housework (not including shopping and childcare) compared to 40 minutes by men. With nowhere else to go, the childcare, social care, health and other services cut in the ‘Big Society’ will generally be picked up by women or not at all.
Wherever women work, they work, on average, for less pay than men: 40 years after the Equal Pay Act the average gender pay gap is 20 per cent per hour, with the gap wider in the private sector (25.6 per cent) than in the public (18.8 per cent). Pay restraint plus job cuts will combine with benefit and tax credit cuts in the budget to lower women’s incomes further.
With regard to benefits and tax credits, the change to an uprating formula linked to the Consumer Price Index for benefits and tax credits alone will see the value of benefits fall year on year, with an estimated saving to the state of nearly £6 billion by 2014-15.
The Budget included a long litany of benefit and tax cuts that will particularly hit women and families with children: a freeze on Child Benefit, lowering the income cut-off for family tax credits for families (from £50,000 total parental income to £30,000), increasing the rate at which tax credits are withdrawn when incomes rise, abolishing the baby element of child tax credit, abolishing the Health in Pregnancy Grant, restricting the Sure Start Maternity Grant and cutting Child Trust Funds. The TUC has calculated that half a million families a year are likely to lose £1,000.
The Budget report claims that the freezing of Child Benefit will be offset by Child Tax credit increases targeted on low-income families, but of course this represents a shift from a universal benefit, claimed by women, to a means-tested benefit that goes to a household. Given Tory hostility to Child Benefit it could effectively also be the trailer for a not too distant proposal to abolish it.
Women are also attacked by another change. Lone parents, who make up a quarter of all families and are 90 per cent headed by women, will be made ineligible for Income Support when their youngest child reaches 5 years old (instead of 10 as at present). The Budget document estimates this will affect 75,000 a year. If they don’t find a job, single parents will only be eligible for the lower rate Jobseekers Allowance (JSA). At the same time JSA is to be cut by 10 per cent after 12 months receiving it, making lone parents suffer the double whammy of two cuts in income.
The Budget’s proposals aimed specifically at disabled people were staggering. Disabled people will, of course, be brutally and specifically hit by the impact of spending cuts on jobs and on services, as well as by the marginalising impact of the Academies Bill and plans for the NHS. However, the specific cut planned for DLA is eye-watering and will have a major impact in lowering the income and living standards of disabled people and reducing independence. The indirect social impacts are hard to quantify but will be huge.
The number of recipients of DLA is to be cut by 20 per cent and overall spending by the same proportion. This is to be achieved by restricting eligibility and introducing a new medical assessment. A staggering £1 billion is to be cut from this single benefit.
Ministers have fostered confusion about what DLA is, presumably to encourage a public atmosphere conducive to attacking the income of people at the poorest end of the income scale and facing entrenched discrimination. The Budget report deals with DLA under a section saying that ‘the government is committed to creating a fair and responsible tax and benefit system that rewards work and promotes economic competitiveness’ and the benefit system ‘supports those most in need, without creating dependency for those who would be better off in work’ (Budget 2010, HM Treasury).
But DLA is not a work related benefit. It was introduced in recognition of the costs associated with being a disabled person. People get it whether they are in work or out of work and use it for a myriad of things. The Budget policy applies to working age DLA recipients only for now, in line with the faux-rationale about encouraging work.
The government’s own research said that DLA has ‘a key role in reducing potential demand for formal services’, and helping people avoid residential care and maintaining good health.
If the state does not support disabled people with these costs, they don’t go away. They are borne by individuals, resulting in the greater levels of poverty among disabled people along with indignity and marginalisation.
However, cutting DLA it will undoubtedly make it more difficult for many disabled people to maintain work. If people lose DLA they will also lose other benefits that are contingent on it, which also support people being able to take up work, like the Independent Living Fund. People who receive Attendance Allowance – carers, the majority of whom are women – will lose this if those they support lose DLA, as they are inter-related.
The government has said the new medical assessment will mirror that introduced to for the work-related Employment Support Allowance (which has replaced Incapacity Benefit for new claimants and which the government is also extending to all IB claimants). At the moment around 50 per cent of people who apply for DLA are rejected, with a further 49 per cent rejected on appeal – a far cry from the open door claimed by ministers. By contrast, 68 per cent of new ESA applicants are rejected – the kind of scale change envisaged for DLA.
Alongside this, the government is going to cut the numbers of people receiving Incapacity Benefit – which is a work related benefit – and at the same time get rid of specialised employment support programmes for disabled people.
The kind of prejudice that will inevitably encourage was shown by the Treasury’s ‘Spending Challenge’ website. Set up to encourage buy-in to deficit reduction and spending cuts, the website invited people to post ideas of what to cut. Inevitable bile followed. The site was suspended after ‘a lot’ of complaints to the Equality and Human Rights Commission that the Treasury was breaching its responsibilities under the equality duties.
Equality legislation may pose less of a restraint in future however. The Equality Act, which synthesises existing anti-discrimination legislation, is due to start coming into force in the autumn. The Conservatives are on record as saying they would not implement some new parts of it – aspects of equal pay reporting and positive action specifically. Their deregulation drive could see important areas removed from the protection of public sector equality duties. Legislative regression could also follow from the yet to be specified regulations to the Act. These Specific Duties set out the things that organisations actually have to do to monitor who they employ and deliver services to, assess whether their impact supports equality, make changes if it does not, involve people in their planning and measure the impact. Labour wanted to make these duties less robust, but left regulations uncompleted. Their final shape therefore is in the hands of this government – whose lack of commitment to equality is reflected not only in this Budget but by making anonymity for rape defendants one of its first priorities.