Public Expenditure Reductions (Women)
(13 years, 7 months ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
It gives me great pleasure to introduce the first Adjournment debate after the recess. There could be no more important subject for it than that of women and the economy. Such a debate could not have taken place 50 years ago, when women’s contribution to the economy was seen as marginal, temporary and time-limited. In the 21st century, however, women play a huge role in the economy, and it is right and proper for us to examine the impact of the Government’s “cuts Budget” on women, the family and children.
This Budget—this package of public expenditure cuts—will bear most heavily on the poorest, on women and on children. Our Chancellor has cut and frozen too many programmes that were aimed largely at women, in one of the most unfair and regressive Budgets that I have seen in 23 years in Parliament. His decision to freeze child benefit, scrap the child trust fund, end Sure Start maternity grants, abolish the health in pregnancy grant, cap housing benefit and freeze public sector pay will have a greater impact on women than on men. Women will shoulder fully three quarters of the burden. Research findings in our own House of Commons Library prove that they will shoulder the biggest burden of the cuts. As a result of changes in the revenue raised through direct tax and cuts in benefit, women will contribute £5.8 billion of the £8 billion that the coalition seeks to raise by 2014-15. They will contribute three times as much as men. More than 70% of the £8 billion that Government Members are so proud of raising will come directly from the pockets and wage packets of female taxpayers.
No Labour Member is a deficit denier, and no Labour Member does not believe that we need to take action against the deficit in the long-term interests of society, the country and our economy. However, we are united in believing that the Government’s proposals are uniquely unfair, and will also prove to be ineffective. The research findings in the House of Commons Library take into account changes in tax allowances, capital gains tax rises and changes in tax credit, benefits and pensions, but they do not take into account the £560 million-worth of cuts in the child trust fund, which suggests that women will be hit even harder than the Library figures suggest. Nor do the figures take into account the cuts in public spending and the effect that they will have on women who work in the public sector.
I am an inner-city Member. Most of my constituents work in the public sector. Many of them are women, and many of those women are in female-headed households. They do not have private sector jobs to step into, and they do not have a man to keep them at home. When families lose their major wage earner it is a huge blow to them, and I fear that it may take years for those families and communities to recover. Women will lose out whether or not they are mothers. Support for children has been cut by a huge £2.4 billion, but even when that is discounted women without children will still pay more than men. When we discount all the benefit changes that will affect mothers, women will still pay £3.6 billion towards the deficit compared with £1.9 billion for men—that is twice the amount—and, as we know, the cuts in benefits will only exacerbate existing inequalities in income between men and women.
Underlying the Government’s package—this Government who claim to be new, warm and inclusive—is a very old-fashioned view of society. I was very struck to hear Iain Duncan Smith, who has looked at poverty issues—
Mr Speaker
Order. May I gently say to the hon. Lady that she should not refer to other Members by name?
Ms Abbott
I was very struck to hear the Secretary of State for Work and Pensions, who has paid a lot of attention to poverty issues, saying that he thought it was important that people were prepared to move around the country from estate to estate in search of work. What family model is he thinking of? The family model he is thinking of is one where only the husband works. It did not seem to occur to him that many of these families also have women who work and who are not willing to pack up and follow their husband around the country. There are some very old-fashioned views of society here.
The Budget, together with the likely changes to the welfare system, seems to me to be more supportive of an outdated male breadwinner and dependent female carer model than the dual earner, dual carer model, which is more representative of society whether in Hackney, inner-city Newcastle or middle England. In short, it suggests that the Government are, for all the window dressing, out of touch and unwilling to move with the times.
The House will not need to be reminded that women rely more on benefits and tax credits than men. A larger share of women’s income is made up of benefits and tax credits. More women than men earn too little—because women are largely among the lower paid—to benefit from the change in income tax thresholds. Women are also more likely to work part time or unpaid, meaning they rely on benefits, particularly tax credits, to boost their income. These changes and the cuts to benefits have been dubbed the worst for women since the creation of the welfare state. I have therefore called this debate in order to put on the record the fact that I think this Budget is not just bad for Britain, but bad for women in Britain.
The Chancellor of the Exchequer insists that his Budget is a progressive Budget but, sadly, that only proves to me that this distinguished product of St Paul’s school does not understand the technical meanings of “progressive” and “regressive” in respect of economic matters. Under any analysis this is a regressive Budget because, in relative terms, it takes more from the poor than from the rich.
Toby Perkins (Chesterfield) (Lab)
On the comments that have been made about the Budget proving that we are all in this together, the analysis that my hon. Friend is setting out demonstrates not only that women are getting it with both barrels, but that at the same time as women are being asked to pay such a high price for the mistakes of the bankers who got the country into this financial mess, the situation of major industries will, through the cut in corporation tax, improve. Women will be expected to pay more, but big business, and particularly the banking sector, will be better off as a result of the Budget. Does that not demonstrate that we are not in fact all in this together?
Ms Abbott
I am grateful to my hon. Friend for that comment. It is extraordinary that this so-called progressive Budget will disadvantage women with families—and particularly poorer women with families—and advantage big business and bankers. The welfare state, which Government Members love to decry, is essential for stay-at-home mums—a strong state is essential for them—but it is also important for working mums.
Government support is essential for mothers who want to stay at home with their children. I went back to work when my son was eight days old—he voted in the Lobby when he was eight days old—but that was my choice. I have always argued—as have my own Government when Labour was in office—that women should have a choice. We should not financially disadvantage women who choose to stay at home. This Budget, in the cuts that it will make to the welfare state, will make it harder for stay-at-home mums and for working women, because of the predominant number of working women in the public sector. Even the initial decision to freeze public sector pay will hit women, because 4 million of the 6 million people who work in the public sector are women and so women are twice as likely to suffer from the pay freeze. When discussing the public sector cuts further, we must consider the number of women who are head of their household and who will be affected by the 600,000 new job cuts likely by 2016.
Widespread discrimination still takes place in the workplace. A report by the Equality and Human Rights Commission calculated that at the current rate of progress it will take 60 years for women to gain equal status on the boards of the FTSE 100 top companies. So we must ask ourselves why the Government have gone ahead with a Budget that hits women so disproportionately. We have to ask ourselves why they have used a ratio of public sector cuts to tax of 80:20, given that even the previous major Tory cuts Budget, which was under Norman Lamont, used a ratio of 50:50. The 80:20 ratio is at the heart of why this Budget hits women so hard.
The Fawcett Society, which campaigns for pay and pensions equality between men and women, has taken the Treasury to court over the Budget; it has filed papers with the High Court to seek a judicial review of the Government’s emergency Budget, and it is right to do so. Its chief executive, Ceri Goddard, has said:
“Successive governments have failed to give enough consideration to how their policies will impact on equality between men and women, but this budget shows a whole new level of disregard for the importance of equality law and everyday women’s lives.”
The public are giving this new Government an element of a honeymoon period, but Government Members must mark my words. They will see what happens as the financial impact of this Budget comes to bear on ordinary people and they realise what the plans for child benefit are, what the consequences of abolishing the child trust fund and the health in pregnancy grant are, and what effects the proposed housing benefit cuts have on children living in housing need in London—the Minister knows this better than I. London is a high-rent area, so many women and children will find themselves homeless or having to live in more overcrowded conditions, which will make it even harder for them to access work.
Mary Macleod (Brentford and Isleworth) (Con)
Does the hon. Lady agree that the increase in the personal tax allowance will help many women? It will remove 880,000 people out of income tax altogether, the majority of whom will be women.
Ms Abbott
That will help some women, but it will not help women on benefits or the very lowest paid women. As I say, the way in which the figures add up means that women are still hit disproportionately.
In conclusion, I urge the Government, even at this late stage, to re-examine the decisions they have made. In particular, I urge the Minister to take seriously the Government’s legal obligation to assess the equality impact of the Budget on different groups, specifically men and women. I urge them to carry out and publish a gender equality impact assessment of the emergency Budget and to take mitigating actions where policies look set to hurt women disproportionately.
Esther McVey (Wirral West) (Con)
I am delighted that the hon. Lady has raised this issue in the Chamber tonight, because I have worked with women in business for the past 10 years. On everything that she talks about—every consequence, every dilemma and every situation that women are in—she has to look to her Government and ask why we are in this disastrous economic state, and she has to bear the responsibility for what is happening. The picture for women in business is mixed. The latest results coming out this week say that a third of women are now the main breadwinner, 39% earn more than their partners and 19%—
Mr Speaker
Order. Could I just very gently say to the hon. Lady that if this is an intervention—and it is—it needs to come to a conclusion very soon?
Esther McVey
My point is that we have to move forward, and the Conservative party is looking at how to get the 150,000 women who are not setting up businesses—when compared with the number of men who are—to do so. That would be worth £7 billion to the economy. What would the hon. Lady’s advice be to women on how to even out the economy?
Ms Abbott
I shall not allow myself to be distracted by the hon. Lady, except to say that the reason why we face the necessity of making cuts on this scale is not Labour’s irresponsibility but greedy bankers’ irresponsibility —greedy, under-regulated bankers who almost crashed the world economy.
Ms Abbott
I am afraid that I cannot, because I want to allow time for the Minister to reply.
I want the Minister to give us her assurance that, before making those cuts, the Government will carry out a full and robust gender equality impact assessment. We all know that savings have to be made; my argument is that they should not be made at the expense of women. We all know that we have to move forward; my argument is that women, certainly in my constituency, will not be able to do so with the ball and chain that welfare cuts and the removal of child tax credits represent. They will not be able to move forward, shackled as they will be by unfair and unthought-out cuts in welfare and public sector spending.
Fifty years ago we could not have had this debate. Fifty years ago there would not have been this many women in the Chamber to debate it. I am glad that Government Members have stayed for this debate. It is important, and women out there, in the country, want to know that their voice will be heard on issues to do with the economy and the potentially devastating cuts package with which the Government seek to meet the challenge of the deficit.
The Minister for Equalities (Lynne Featherstone)
I very much welcome the opportunity to speak on this subject, and to clear up once and for all some of the myths surrounding the Budget and its impact on women.
I shall refer first to some of the points that the hon. Member for Hackney North and Stoke Newington (Ms Abbott) made, before putting the Government’s case per se. The Library findings were biased in their Budget analysis. The analysis was not robust; it included only selective measures.
Mr Speaker
Impugning integrity is neither desirable nor orderly. Perhaps I did not hear as clearly as the hon. Lady heard, but I shall listen intently. To my knowledge, nothing disorderly has occurred, but the hon. Lady is a long-standing—I will not say old, because she is not old—campaigner, and she has put her view forcefully on the record.
Lynne Featherstone
Thank you, Mr Speaker. No integrity was being impugned, but the Library itself notes that its research paper is not a detailed assessment based on individual tax and benefit data and, therefore, remains a rough and ready approximation.
Fiona Mactaggart (Slough) (Lab)
Has the hon. Lady commissioned the kind of detailed assessment, based on tax and benefit information, that she is uniquely placed to do? If she has, will she tell the House what it concluded about the emergency Budget?
Lynne Featherstone
I shall certainly come to that in the course of my speech.
Any analysis of tax and welfare changes by gender must make assumptions about how resources are shared within the household, and the Library’s research makes an extreme assumption that no income is shared. It is not robust, and it is based on outdated assumptions about family structures. On the issue of cuts to welfare hitting the poorest hardest, the Government have been clear that the burden of deficit reduction will have to be shared. The reforms that the Government are undertaking do protect the most vulnerable, including children and pensioners, and I shall go into detail about that in a moment.
John Hemming (Birmingham, Yardley) (LD)
There is some confusion about whether the Budget is regressive or progressive. Does the Minister accept that if analysis is done by the size of household budget—expenditure deciles—the Budget is progressive?
Lynne Featherstone
I thank my hon. Friend for that helpful intervention. Obviously, the Government case is that the Budget is progressive. We are increasing child tax credits for the poorest families, protecting them against poverty.
Toby Perkins
If the hon. Lady believes that the Library was biased, does she think that the IFS was also biased when it said that the Budget was clearly regressive?
Lynne Featherstone
I think that the Institute for Fiscal Studies was inaccurate in what it said. The Government have made it clear that the burden of deficit will have to be shared. At the Budget, the Government took unprecedented steps in publishing details. The Treasury welcomes the innovative approach of the IFS in its revised analysis of the Budget and is open to exploring new ways of assessing the potential impact of Budget measures. However, the IFS states that in order to include previously unmodelled reforms the report makes some strong assumptions that add uncertainty to the analysis.
Kate Green (Stretford and Urmston) (Lab)
Can the Minister tell us which assumptions the IFS has made that are considered unreliable or not valid?
Lynne Featherstone
I will come to that point later if I can.
I wanted to address the point that the hon. Member for Hackney North and Stoke Newington made about the public sector. Although there are a majority of women in the public sector, the Government have made efforts to support the most vulnerable public sector workers—those earning less than £21,000 a year, who will be exempt from the freeze. That will affect about 1.7 million public sector workers whose salary falls below the threshold—mostly women—who will see a flat pay rise of £250 in both years of the freeze. The Government are aware of the statutory obligations when assessing options for spending reductions.
I shall move on to a more general response to the hon. Lady. Fairness is a key theme, along with freedom and responsibility, and underpins our new Government programme. We see it as even more important during difficult times than in good times, not just because we believe it is the fundamental right of every individual to have the opportunity to fulfil their potential, but because we realise that fairness is the key ingredient to getting the country back on its feet. We cannot afford to continue wasting the talents and skills of women, of ethnic minorities and of disabled people—of all those who have been held back for no reason other than their background. Without fairness we will never achieve economic recovery, let alone full economic growth.
Yes, we have to take some tough decisions to tackle the unprecedented deficit we inherited, but as my hon. Friend the Member for Wirral West (Esther McVey) said, we should not forget that the cuts are Labour’s legacy. Labour doubled the national debt and left us with the biggest deficit in the G20. We have to clean up that situation to get the economy moving. Unless we address the deficit first and foremost, more women will be out of work and more women will suffer the consequences of the recession.
Lynne Featherstone
No, not at the moment.
Fairness is at the heart of all our decisions, so that the most in need are protected. Lord knows, the coalition Government have made extreme efforts to address the issue of protecting the vulnerable. We have spent more than £5 billion to try to equalise. That is why we are refocusing Sure Start, which the hon. Lady mentioned. We are ring-fencing its budget for this year and introducing 4,000 health visitors dedicated to helping the most disadvantaged families. That is why, as was mentioned, we are determined to make work pay by raising the tax threshold, lifting 880,000 of the lowest paid workers out of tax. The majority of them are women, who will come out of income tax each year progressively until the threshold has risen to £10,000. That will aid the lowest paid workers.
That is why we are determined to reform welfare to get people into work, creating a new Work programme to give the unemployed tailored support. It is why, as I said, we are protecting the lowest-paid public sector workers. It is why we are increasing child tax credits for the poorest families, protecting against rises in child poverty. Child poverty rose in the past few years under the Labour Government. [Interruption.] No, the whole point of tax credits for the poorest families is to protect against rises in child poverty. It is precisely why we are getting to grips with the deficit—so that we do not have to keep spending more and more on debt interest, leaving less to deliver the crucial public services that women need and depend on.
We are absolutely committed to a fairer future for women and their families, but the Government are not just about supporting women and their families through the tough times. I forgot to mention the index linking of pensions. I remind the hon. Member for Hackney North and Stoke Newington that it was the Labour Government who made the derisory 75p pension offer, and who abolished the 10p tax band. I did not hear Labour Members cause uproar about either of those measures—well, the hon. Lady may have mentioned them, but in general terms, those were Labour policies that affected the poorest and most vulnerable, and they definitely hit women hardest.
We want to give people better prospects for a brighter future. We want to create the kind of cultural change that will enable people to escape the vicious cycle of inequality and poverty, so that they can improve the quality of their life and the lives of their family. The hon. Lady should know as well as I do—our constituencies are not dissimilar—that more than 2 million children live in poor housing, in crowded rooms and in squalid conditions. One in five children lives in poverty. I see for myself in my constituency the consequences of that vicious cycle, which people could never get away from because there were no pathways out. That is totally unacceptable. She and I both know about the pressures on housing in areas such as Hackney and Haringey.
We are putting bold new measures in place that will tear down the discriminatory and cultural barriers holding people back. The Prime Minister and the Deputy Prime Minister have set up a childhood and families taskforce to tackle the barriers that prevent a successful family life and happy childhood. One of the main issues that the taskforce will consider is how we can help parents to balance their work and life. The hon. Lady raised the issue of single parents; nine out of 10 single parents who are out of work do not want to live off the state. They want a paid job. They want their independence. The problem is that there are not the flexible jobs out there that could fit with family life.
Many couples and individuals find it enormously difficult to strike the right balance between work and home. Traditional arrangements, in which mothers take the lion’s share of leave, simply do not suit everyone’s needs in the modern world. I totally refute the hon. Lady’s suggestion that the coalition Government are in any way old-fashioned. Our commitment is to moving the agenda forward. That is why we have already committed to looking at a system of shared parental leave and at extending the right to request flexible working to all. The latter, in particular, will tackle the old-fashioned notion that women ought to perform the bulk of caring—
Fiona Mactaggart
The hon. Lady promised earlier that she would tell the House her assessment of the equality impact assessment.
Lynne Featherstone
We are making it easier for families to access high-quality, affordable child care. We are extending free nursery care provision to 15 hours a week for three and four-year-olds, and continue to fund early learning and child care for more than 20,000 of the most disadvantaged two-year-olds. All those measures make a difference.
We will promote equal pay by making pay secrecy clauses unenforceable, allowing women to shed light on discriminatory pay practices. We are working to end the glass ceiling, which blights so many women’s careers, by promoting diversity on company boards. The Government will lead the way; that is why we have set ourselves the ambitious target that by the end of Parliament, at least half of all new appointees to the boards of public bodies will be women. We will tackle violence against women by introducing a coherent cross-Government strategy.
I apologise to the hon. Member for Slough (Fiona Mactaggart) for omitting to refer to equality impact assessing, which she thought important. I totally agree with Opposition Members: it is important. In fact, it is a legal requirement.