Nick Shaxson ■ How do the UK parties’ promises on tax measure up on gender equality?
Ahead of the UK General Election due on May 7th, we are delighted to post a guest blog by Professor Sue Himmelweit of the Women’s Budget Group. The blog explains clearly just how important these issues are, and it also soon becomes clear that although this is a UK-focused blog, it has obvious implications for all countries.
Clearly, these issues also mesh very closely with our fast-growing focus on tax justice and human rights.
How do the UK parties’ promises on tax measure up on gender equality?
Guest blog by Prof. Susan Himmelweit
The Conservatives, Liberal Democrats and Labour have all three argued themselves into a big mess over tax. All have promised not the raise the main rates of income tax, National Insurance Contributions (NICs) and Value Added Tax (VAT). As a result, meeting their deficit reduction aims will be dependent on cuts in spending – but these they refuse to specify. This would be farcical if the consequences for those on low income, and women in particular, were not so severe.
Greater gender equality in incomes and life chances depends on having a tax system that raises sufficient revenue to pay for good quality public services and a comprehensive social security system.
Women are more affected by cuts in public services than men are. This is partly because of their caring role within the family; partly because other family members are less likely to be around to look after women when they are old; and partly because women are likely to be poorer and thus more dependent on public services.
When public services are cut, women suffer particularly in three ways: they lose the services themselves, they will be ones who in practice make up for the lost services (possibly giving up employment to do so,) and they are more likely to lose their jobs, as the majority of public sector workers providing front line services are women.
Cuts in social security spending also matter greatly to women, since lower incomes mean they rely more on benefits. The Conservatives have refused to specify where most of the £12 billion of cuts in what they call “welfare” will come from, except saying that they will not fall on pensioners. As the Institute for Fiscal Studies has pointed out, to make this level of savings, child benefits and/or child tax credits will almost inevitably need to be cut substantially, impacting disastrously on child poverty. Already these benefits have been frozen for two years, a move that neither the Lib Dems nor Labour will reverse. Women are more likely than men to live with children, and in joint households are usually the ones who spend on their children’s needs. In poorer households this may well mean that women will try to protect their children as best they can from any cuts by doing without themselves.
So women have many reasons to want a tax system that raises sufficient revenue. The unedifying trend of parties competing in their promises to constrain their own ability to raise taxes is dangerous. The last five years have seen some £56 billion per year of tax-giveaways, all of which could have been better and more fairly spent on saving social security and public services. Most of these tax give-aways have gone to men.
Since 2010, a huge amount has been spent on raising the personal allowance in stages, from £7,765 in 2010-1 to £11,000 by 2017-8; the Conservatives and the Lib Dems would raise the threshold for paying income tax further in the next parliament. The majority of gainers at each stage have been men, since more women than men were earning below the current threshold – and so gained nothing. The rises so far have reduced the percentage of adults who pay income tax from 61% to 56%. If the threshold is raised further, the tax base will be further reduced and those gaining will be smaller in number, better-off and even more male. This is the most significant tax giveaway that favours men and reduces revenues.
And there are other tax giveaways to men promised. The Conservatives, but not the Liberal Democrats, also plan to raise the higher rate threshold by more than inflation, another tax giveaway that reduces revenue and even more strongly favours men. The Conservatives and UKIP also wish to raise the level of the transferable tax allowance which allows a married person earning below the personal allowance (meaning in practice “stay-at home mum” or “housewife”) to transfer some of their unused allowance to their spouse (the “breadwinner”). This tax is the tax give-away that favours men the most, since it has the effect of paying married men for having a non-employed wife.
Labour, by planning to reintroduce the 50% additional rate for the highest earners has a policy that works in the opposite direction, raising additional revenue largely from men. But Labour also plan to reintroduce a 10% bottom rate for the lowest earners, not all that different from raising the personal allowance in reducing revenue and favouring men. However they plan to pay for it by abolishing the transferable tax allowance: on balance this probably just favours women.
The anti-austerity parties, the Greens, SNP and Plaid Cymru do offer an alternative for women. They would not cut benefits further and the Greens would raise taxes to fund a comprehensive income support scheme and high quality public services, including a free, universal and flexible system of good-quality early education and free social care.
Prof. Susan Himmelweit works with the Women’s Budget Group, an independent voluntary organization that analyses government spending plans, budgets and policies to promote a better understanding of the impact of government decision making on women and to improve the quality of that decision making so that public resources are allocated for the benefit of all.
- Also from the Women’s Budget Group – Plan F: a feminist economic strategy for a caring and sustainable economy.
- Also hear Sue Himmelweit interviewed in the April Taxcast.
How to fight inequality: a chat with Ben Phillips
Online Conference: How to Pay for the Climate Transition
Women need real social protection that goes beyond the aspirational
New book provides practical solutions to make tax work to reduce poverty
$427bn lost to tax havens every year: landmark study reveals countries’ losses and worst offenders
The State of Tax Justice 2020
20 November 2020
Systemic racism and tax justice: the Tax Justice Network podcast, July 2020
In Apple’s victory lies a defeat for women’s rights
Taking Panama to task: Women’s rights trampled by financial secrecy
Submission to the Committee on the Elimination of Discrimination against Women 76th Session pertaining to the 8th periodic report submitted by Panama
15 July 2020