Women in the UK Could Face Harder Times Without Increased Public Spending
Economists caution that if Labour continues with the current Conservative spending plans, the poorest women in the UK could see their living conditions drop by 21% by 2027-28. Campaigners are urging Rachel Reeves, the shadow chancellor, to increase public spending in the upcoming budget to prevent further hardship for women.
Impact of Cuts and Welfare Changes
The Women’s Budget Group (WBG) reports that since 2010, the standard of living for the poorest women has been on a sharp decline. Their analysis suggests that women could be 9.4% worse off by 2027-28, amounting to a yearly loss of £3,162. Men are expected to be 5.8% worse off, losing about £2,395 annually. The decline is primarily due to reductions in welfare benefits and public service cuts made by the Conservative government.
Urgent Need for Investment in Public Services
Ignacia Pinto, a senior researcher at WBG, stressed that the situation is critical due to years of underfunding public services and cutting benefits. She argues that a thriving economy depends on strong public services and that a growing economy is impossible when many families rely on food banks and more children live in poverty.
Calls for Fairer Taxes and Better Social Safety Nets
The WBG is calling for more public investment, including removing limits on benefits like the two-child cap. They suggest funding these measures through more balanced taxation, such as equalizing capital gains tax with income tax and introducing a wealth tax.
Single Parents Hit the Hardest
One of the main reasons for the drop in living standards has been the repeated freezing of benefits for working-age individuals, with single parents being particularly affected. Sarah Lambert from Gingerbread, a charity for single parents, said the government needs to act immediately to reform the social security system and reduce child poverty.
Labour’s Stance on Spending and Taxes
Labour leader Keir Starmer has pledged that there will be no return to austerity. Still, Reeves highlighted that the previous Conservative government left the UK with a £22bn shortfall in public finances. Labour has ruled out major tax hikes such as increases in income tax, national insurance, or VAT during the last election.
Upcoming Budget and Financial Decisions
The chancellor is expected to announce spending plans for the next year on 30 October. She will also review public debt measures, which might open up opportunities for more investment. However, she has also emphasized the need to make tough financial choices.
Underfunding of the NHS and Future Spending
A report from Lord Darzi on the NHS pointed out the damage caused by years of underfunding and suggested that healthcare spending could increase. However, any rise in health funding would require matching reforms to ensure sustainability.
Debate Over Tax and Spending Plans Continues
The WBG’s analysis comes as debates about the government’s tax and spending plans grow. Recently, parliament voted to restrict the winter fuel allowance to pensioners receiving income-related benefits.
Criticism of the Economic Strategy
Former Bank of England chief economist Andy Haldane has criticized Rachel Reeves for focusing on the public finance crisis without offering specific solutions earlier. He suggested that this approach created unnecessary fear and uncertainty.
Government Pledges to Tackle Inequality
A government spokesperson said that boosting economic growth and reducing inequality are linked goals. The chancellor has promised to improve economic opportunities for women, close the gender pay gap, and invest in childcare and fair pay practices.
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