Written evidence submitted by Women's
Budget Group |
Knowing about the gender implications of policy changes
is important not only for ensuring that gender inequalities are
reduced, but also so that policies can be designed to meet their
own goals most effectively. This submission from the Women's Budget
Group raises a number of concerns about possible gender implications
of ways in which UC may be designed.
There are a number of unresolved issues that are
of crucial importance in determining whether the introduction
of Universal Credit will increase or decrease gender inequalities
in income, in work incentives and in the access of individuals
to household income. These issues may also undermine the effectiveness
of UC in meeting its aims of reducing the complexity of benefits/tax
credits and ensuring more consistent work incentives.
The Women's Budget Group recommends that legislation
should not be put before parliament until those crucial issues
are resolved. Otherwise it would require members of parliament
to vote on legislation without being able to take into account
their gender implications, in contravention of the spirit, and
possibly the letter, of Parliament's duty to take account of the
impact of proposed measures on gender equality.
These issues include:
- Whether it is conducive to good resource use
in families for Universal Credit (UC) to be paid in a single undifferentiated
monthly payment to one member of a family.
- ¾ In
particular, whether payments for children's needs and childcare
costs should be paid to the same person as the rest of UC.
- ¾ On
what basis payments for childcare will be made.
- ¾ The
longer-term future of Child Benefit as a separate benefit once
UC is introduced.
- ¾ A
similar question concerning the future of Carer's Allowance.
- ¾ The
form in which conditionality will operate for multi-person households
and in particular how children's welfare will be protected.
- ¾ What
can be done to mitigate the decrease in work incentives to enter
employment for "second earners" in some families in
the UC system.
- ¾ How
attachment to the labour market can be maintained though periods
in which employment costs are particularly high, such as around
the birth of a child.
- ¾ How
to cope with regional variations in the costs of taking employment,
without creating the counterproductive effect of families moving
into areas with lower employment opportunities and, in particular,
women's employment being disrupted by such moves.
- ¾ Finding
terminology to describe family roles that does not help solidify
an unequal division of family responsibilities and labour.
1. The UK Women's Budget Group (WBG) is
an independent, voluntary organization which brings together individuals
from academia, non-governmental organizations and trade unions.
We have been scrutinizing the gender implications of the budgets
and spending plans of UK governments since the early 1990s.
2. The WBG welcomes the Committee's decision
to ask for submissions on the proposals in the White Paper on
Universal Credit. This submission raises a number of concerns
about possible gender implications of ways in which UC may be
designed to meet the laudable aims of reducing the complexity
of benefits/tax credits and ensuring more consistent work incentives.
Knowing about the gender implications of policy changes is important
not only for ensuring that gender inequalities are reduced, but
also so that policies can be designed to meet their own gaols
3. The WBG recommends that legislation should
not be put before parliament until those crucial issues are resolved.
Otherwise it would require members of parliament to vote on legislation
without being able to take into account their gender implications,
in contravention of the spirit, and possibly the letter, of Parliament's
duty to take account of the impact of proposed measures on gender
4. The working assumption that under Universal
Credit only one partner would receive the Universal Credit payment
for a joint claim needs more justification. The idea that families
will manage better, resources be shared more fairly and used more
to the benefit of children, when a single undifferentiated monthly
payment is made to one member of the family (in practice, unless
the government actively discourages this, more likely to be the
man in heterosexual couples) is challenged by much recent research
into what goes on financially within households. Women are usually
the managers of household money in low-income families, often
by performing a complex juggling act in which the timing of a
variety of different payments plays an important role. Attention
should be paid to what is already known about intra-household
financial management in deciding the form in which UC is paid
and the frequency of payments.
5. In particular, there is good reason why
child benefit and payments to children and for childcare in the
tax credit system go to the mother or "main carer".
Without evidence to the contrary, it would seem best to continue
that system and avoid a significant redistribution of resources
from women to men. Evidence from research done prior to the introduction
of tax credits
- as well as the current research with low- to moderate-income
couple families from a recent research project investigating "Within
Household Inequalities and Public Policy" (WHIPP) as part
of the Gender Equality Network funded by the Economic and Social
Research Council (www.genet.ac.uk)
show the continued salience of gender roles in intra-household
finances. This should be used to think carefully about how the
different components of UC should be labelled and to whom they
should be paid.
6. The form of payment towards childcare
costs under UC has not been established. This is not a minor detail
but for many parents, particularly lone parents and second earners,
may determine whether taking employment is really worthwhile.
This is not simply a question of marginal deduction rates but
also the availability, affordability and convenience of good quality
childcare. It does not seem a good idea to move to legislation
without the way in which childcare support will be delivered being
7. Child Benefit is no longer a universal
benefit. The White Paper states that it will not be part of Universal
Credit. But what will happen to its value, and will further means
testing be introduced in future? It is crucial that Child Benefit,
which does not cause work disincentives, is retained as a separate
universal benefit at a sufficiently high level to make a meaningful
contribution to meeting children's needs, and provide their "main
carer" with control of at least some income. Given that the
Secretary of State had previously suggested that Child Benefit
might be integrated with UC in order to overcome the anomalies
created by the withdrawal from higher rate taxpayers, it would
be helpful to have confirmation that this is not envisaged in
the longer term.
8. The future of the Carer's Allowance is
also important as a form of independent income for those with
significant caring responsibilities, most of whom are women. Whether
this benefit is retained as a separate, individual non-means-tested
benefit will crucially affect the gender impact of the introduction
of UC. Until this matter is resolved, any gender impact assessment
will be sufficiently incomplete that it cannot fully inform members
of parliament in deciding how to vote on the introduction of UC.
9. The form in which conditionality will
operate is a crucial matter. Caring responsibilities are often
uneven or unpredictable. School holidays, for example, may make
taking some forms of employment difficult for mothers who could
work during school term-times. Care needs of elderly and disabled
people are particularly unpredictable and the conditionality regime
(which it appears will apply to those who are not judged to have
"substantial" caring responsibilities) would have to
be flexible enough to deal with this, since few carers will abandon
those for whom they care even in the face of severe financial
penalties. Another issue that needs clarifying is how the failure
of one partner to meet conditionality requirements might impact
on the other's access to an income - and in particular, how children
will be supported if either or both of their parents do not conform
to conditionality rules. Again before legislation is proposed
these issues need to be sorted out if parliament is to have the
ability to make an informed decision on the introduction of UC.
10. In families with caring responsibilities,
"second earners" are known to be more sensitive to work
(dis)incentives because it costs them more in both money and time
to enter employment. In practice it is usually the woman who is
seen as a couple's "second" earner. For couples already
above their earnings disregard, the change to UC could increase
the marginal deduction rates of potential/actual second earners
under the tax and NI threshold from the current 39 (soon to be
41)% to 65% under UC. If there is no extra earnings disregard
for second earners, this can only encourage a more uneven division
of gender roles and may counteract the government's intention
that short jobs become economically viable for those with caring
11. This is not just an issue of restricting
choices made at a point in time. A decline in "second earning"
in poorer families would lead to a long-term increase in child
poverty and greater financial insecurity. "First earners"
may lose their jobs and many families split up. Keeping an attachment
of mothers to the labour market is crucial in protecting the well-being
of children in poorer families. Children tend to live with their
mothers and so the poverty rates of children follow those of their
mothers. It is particularly important to enable women to keep
that attachment through stages in which the financial and organisational
costs of taking or staying in employment are particular high,
such as around the birth of a child. There may be a case for increasing
earnings disregards at times when the cost of employment are particular
high and re-considering earnings disregards for individuals.
12. There is considerable evidence that the high
cost of childcare, housing and/or commuting makes paid work relatively
much less worthwhile in some areas of the UK, notably central
London. We urge the Committee to examine this problem - and consider
ways of lessening its impact on the propensity to find and take
employment, including that it does not result in families moving
into lower cost areas where jobs are in practice scarcer. Moving
families is disruptive, particularly for women who often have
to manage the process, including settling children into new schools,
giving up their own jobs in the process, and potentially losing
the support of families and neighbours that enabled them to take
employment in the first place.
13. Finally, we would ask that care be taken
in the language used to describe family members in any legislation.
The terminology used by government should not help solidify an
unequal division of family responsibilities and labour. We have
been disturbed for some time by the use of the term "main
carer" in the tax credit system. While, as noted above, we
think it is important that payments for children and childcare
go to those who actually take responsibility for their care, we
would not want an implied assumption that it should inevitably
be the case that there is a main carer. Many parents are
trying to share care responsibilities equally. The language used,
while it should be flexible to recognise actual practice, should
be careful not to impede change or restrict the possibilities
of more equal sharing of roles and responsibilities within families.
150 Lundberg, S J, Pollak, R A and Wales, T J (1997),
"Do husbands and wives pool their resources? Evidence from
the United Kingdom child benefit", The Journal of Human
Resources 32(3): 463-480. Back
Goode, J, Callender, C and Lister, R (1998), Purse or Wallet?,
London: Policy Studies Institute. Back
See, eg, Sung, S and Bennett, F (2007), "Dealing with money
in low- to moderate-income couples: insights from interviews",
Social Policy Review 19, Bristol: The Policy Press. Back