THE BLOG

Has The Treasury Got Something To Hide?

21/11/2016 17:35
Carl Court/PA Wire

Wednesday's Autumn Financial Statement will be a critical test of Theresa May's commitment to 'a country that works for everyone'. Some might have hoped that her promise to fight for 'just about managing' (JAM) working class families signalled a change in direction. Were we about to see a move away from austerity policies that have led to services being slashed and millions dependent on food banks to eat? From the hints that have come out of the Treasury so far it looks like we are in for more of the same, although don't count on the Treasury to make that clear.

The Financial Times is reporting that the Government will raise the income tax threshold to £12,500 and raise the threshold for the 40% tax rate to £50,000. This is the latest in a series of tax cuts since 2010 which have cost a great deal (changes to tax thresholds since 2010 will cost £20.5 billion a year by 2020) but do not benefit the poorest. When combined with on-going cuts to benefits and tax credits this will mean yet more money transferred from poorer women to better off men.

The Government has an obligation under the Public Sector Equality Duty to have due regard to the impact of its policies on equality. But they've not exactly been keen to make that a reality. On Friday Parliament's Women and Equalities Select Committee criticized the Treasury's Equality Impact Statement of last year's Autumn Financial Statement as 'insubstantial and lacking in detail', highlighting that while it gave a few examples of how different equality groups might benefit from specific policies it contained no analysis of negative impact on these groups at all. Furthermore, while previous equality statements included information about how tax and benefit changes would affect people in different income groups, this information had been removed altogether by the 2015 Autumn Financial Statement.

The Treasury refused to send a Minister to answer the Committee's questions about equality impact, saying that individual Government departments were responsible for doing this analysis. It then refused to provide copies of the analysis that these departments had sent to the Treasury, to the obvious frustration of the Committee. This steadfast refusal to engage with the Committee begs an obvious question: do they have something to hide?

Work by the Women's Budget Group on the cumulative impact of Government tax and spending decisions since 2010 has revealed what the Treasury seems shy of sharing with Parliament and the public. Not only have the poorest households and women been hit hardest by changes since 2010, they will be hit harder still by policies planned for 2015-2020. In cash terms, women in the second poorest 10% of households will lose on average £2000 a year by 2020 (15% of their individual income and 12% of their household income) compared to their incomes if tax and benefit policies had remained as they were in March 2010. This compares to men in the top 10% of households, who are set to find their net income increase by £329 over the same period. All this suggests that Theresa May has a long way to go if she is to live up to her promise that 'when it comes to taxes, we'll prioritise not the wealthy, but you'.

If the Autumn Financial Statement continues the pattern of tax cuts which benefit men and the better off paid for by women and the poorest sections of society it is unlikely that the Treasury will want to make that explicit. The Women's Budget Group, however, is determined not to let these inconvenient truths be swept under the carpet. We are working with the Runnymede Trust to produce a detailed breakdown of the winners and losers from the AFS by gender, ethnicity, income and disability. For the first time ever this assessment will show the impact on groups by more than one category (for example Black and Minority Ethnic women, or women in different income groups).

Our work with the Runnymede Trust will provide much needed data on how much each group will gain or lose and also, crucially, show that this type of assessment is possible. There are no excuses: if Treasury wants to understand its impact on different groups, as indeed they are required to under the Equalities Act, the tools and methodologies are available for them to do so. But it seems, on recent form, they'd rather keep that unpleasant story far from view.

Want to find out more? You can read our cumulative impact assessment of Budget decisions since 2010 here. Also, the Women's Budget Group will be live tweeting our response to the AFS - follow @WomensBudgetGrp or #AFS2016WBG. Our quantitative analysis of the AFS will be available on our website - wbg.org.uk - from Friday 25th November 2016.

Comments

CONVERSATIONS