Will Labour’s new budget finally deliver for women?

The first female Chancellor in Britain’s history will deliver her first budget this week with a promise that there will be “no return to austerity”. Rachel Reeves has also committed to making the economy work for women; this is an historic moment, and the budget will be one of her first significant opportunities to deliver for women’s equality and on ensuring a better future for us all. This requires serious investment in our public services and in our social security system.

The first Labour Government in fourteen years has inherited an economy in bad shape and facing multiple crises. Public services are on their knees after over a decade of underinvestment, there are persistent gender pay and earnings gaps, a decrease in living standards, and rising levels of child poverty.

Women have been made worse off by these crises. Take the decrease in living standards. Cuts to public services and social security have made most of us poorer than we were pre-2010. But women were impacted harder, losing proportionately twice as much as men from austerity cuts. Economic inequalities widened as a result, not just between women and men but between poorest and richest, with the poorest women seeing a decrease in their living standards of 21%, compared to the wealthiest men who lost just over 2%.

Public services are the foundations of a strong economy and essential for a healthy population and so fundamental to us all. But they are particularly important for women, as the majority of service users, for themselves and people they care for, and as most of the workforce in sectors like education, healthcare, adult social care and childcare.

Women also tend to fill in the gaps with their own (unpaid) care work when these services are not there. So, when funding for public services is cut, women are impacted three times over: as users, as workers and as unpaid carers.

When funding for public services is cut, women are impacted three times over: as users, as workers and as unpaid carers

The gender pay gap persists as these female-dominated sectors are some of the lowest paid in the economy, and more women cannot participate fully in the labour market because there is no support with caring responsibilities. And with a social security system that has been frayed through austerity cuts and changes since 2010, more and more families are dragged into poverty, with children’s lives and futures most impacted.

There is no getting around the fact that to fix these crises the Government will have to spend money. The new Government’s slogan of ‘fixing the foundations’ is the right focus as without serious investment in the things that underpin our economy – transport, energy, hospitals, schools, but also teachers, social care workers, nurses, our social security system – we cannot hope to improve Britain’s economic situation nor tackle gender inequality. This must include a commitment to fund public services based on need.

The Chancellor can create much-needed public investment without jeopardising public finance sustainability. Borrowing is one way of doing this, and if done to invest in the right things it’s an important one. Recent confirmation that the Government is looking to change its (self-imposed) fiscal rules is very welcome. When assessing financial sustainability, it is important to consider not just Government's liabilities, but the assets it owns as well.

This is why using a more comprehensive measure against which to assess debt would be positive news for women. It would encourage the Government to invest in the foundations of our economy, including public services from which women benefit particularly.

In order to maximise this positive impact, we encourage the Chancellor to go a step further and include in this measure of the government’s assets not just the public buildings and the physical infrastructure that underpin our economy (hospitals, schools, social housing, etc), but also the value of the staff and services themselves – our social infrastructure. This would provide a more accurate measure of those assets’ worth, while recognising their value and encouraging further public investment on them.

Another way the Chancellor has to raise money is through taxation and a particularly fair method would focus on wealth. It would call on those with the broadest shoulders and who have seen their fortunes rise considerably in the last few years to contribute the most. Because wealth is disproportionately concentrated in the hands of men, relying on tax revenues from wealth to invest in our social infrastructure would also contribute to narrowing gender inequality, while strengthening the economy and improving everyone’s well-being. Increasing the capital gains tax rate and thoughtfully reforming it would be a very welcome first step.

Crucial to a resilient economy is an adequate and well-designed social security system. We welcome the Government’s ongoing and planned reviews into Universal Credit, child poverty and our parental leave system. We need a benefits system that not just alleviates poverty but also prevents people, especially children, falling into poverty in the first place. We need a system that supports people with additional needs, such as disability or ill health, and recognises important contributions to society, such as raising children or caring for the elderly.

The cuts and changes to our benefits system in the last fourteen years and their disproportionate impact on women and children need to be recognised and rectified if we are to improve women’s economic situation and achieve equality.

Tomorrow, the first female Chancellor in Britain’s history has the opportunity to make a significant contribution to building an economy that works for women. A long-term and funded commitment to fix our public services and social security system should be at the core of it.