Lone Mums can expect to lose up to 8.5% of their annual income - equivalent to a month's income every year - as a result of Coalition changes to tax and benefits, says a study...
Another day, another study which shows that the effects of the cuts will impact hardest on those who are, collectively, some of the most vulnerable. Lone parents are the big losers from the Coalition's reforms to tax and benefits, and single women find themselves worse off than single men, says a new report.
• Single women will lose an average of just under 5% of their annual income as result of changes to the tax and welfare system by 2015
• Lone mothers can expect to lose 8.5% of their annual income by 2015, equivalent to a month's take home income every year and three times the percentage amount the average childless couple will lose
According to Anna Bird, acting chief executive of the Fawcett Society:
"The results are clear: women are bearing the brunt of cuts... Some of the least well off in our society are being forced to act as shock absorbers for the cuts, with women – in particular single mothers - faring worse."
In a sense this impact is predictable: lone parents are particularly reliant on income from benefits and tax credits, and 92% of lone parents are women. They are being hit badly because the value of benefits generally is shrinking (because of changes in the way they are uprated), while others are being reduced, frozen or withdrawn: housing benefit, child benefit, Sure Start maternity grants, and the childcare element of the working tax credit.
Interestingly, the government has argued that this kind of analysis was impossible. Last summer the Fawcett society launched a judicial review of the June 2010 emergency budget on the grounds that the chancellor had failed to take proper account of the impact of his policies on gender inequality (the challenge was subsequently dismissed). The Treasury argued in its defence that it was:
"...not possible accurately to assess the extent to which Budget measures affect women and men"
This study argues that it is, and that the government not only has a legal duty to use its own more comprehensive data to do so, but should build it into its future budget plans to ensure fairness. According to Bird:
"This puts paid to the idea that the government can't anticipate or predict the impact of its fiscal policies on different demographic groups. Had the Treasury been doing this research in the first place, single mothers might now not be facing a situation where they can't afford childcare and so can't work, and where some of the poorest women in our society are right now getting poorer."
When I spoke to the Treasury this morning they had not prepared a response (I'll update the blog if they do).
One way of escaping the benefit squeeze, of course, would be to encourage single parents into paid work. Labour developed this policy, and the Coalition has accelerated it. Lone parents whose child has reached the age of five will from October be moved from income support to job seeker's allowance, requiring them to actively search for work and accept a job if offered. Fine, except that it is increasingly hard to get work, particularly work that is flexible enough to meet the childcare needs of single parents, and childcare itself is increasing scarce and expensive.
The Fawcett society calls this the "lone parent employment challenge":
"At the same time as the coalition government introduces wide-scale welfare reform with the intention of "making work pay", they are reducing the level of support for childcare and training costs that help lone parents into work."
• Update Thursday 23 June, 5.45pm
The Treasury has now responded to the Fawcett report. I think what it is trying to say is that it disputes the conclusion that single mothers will be worse off as a result of benefit changes. Here is the comment from a
Treasury spokesman:
"Cutting the deficit and getting the economy going again is good for everyone. This has meant tough decisions, but the Government has made these in the fairest way, taking real action to benefit women in all aspects of their lives. Child Tax Credits have been increased for the poorest families and action taken at the June Budget will give around 25,000 lone parents the support needed to help them back to work. What's more, 260,000 women will be taken out of tax by the Government's increase in the Income Tax personal allowance."
"The IFS itself has acknowledged that the Treasury has published unprecedented distributional analysis since June 2010 and that the analysis in this report is incomplete, as it excludes the impact of Universal Credit. In a previous report the IFS has made clear that single women will benefit more on average from the Government's Universal Credit than single men."http://www.guardian.co.uk/society/patrick-butler-cuts-blog/2011/jun/23/single-mums-biggest-losers-from-benefit-cuts
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