Welfare Reform and Work Bill Committee

Written evidence submitted by Chwarae Teg (WRW 48)

Welfare Reform and Work Bill

Chwarae Teg is a Welsh organisation working to build a Wales where women achieve and prosper. We do this by working with women to broaden horizons and build confidence and skills; working with employers to create modern workplaces that are successful by harnessing everyone’s contribution; and working with influencers, educators and decision makers to build a society that values, supports and benefits women and men equally.

Key messages

1. Welfare reform has had a disproportionate impact on women. Estimates suggest that 74% of savings made to date have come directly from women's pockets [1] and further analysis by the House of Commons Library suggests that 70% of planned savings to be made by 2020/21 will also come from women's pockets. [2]

2. Changes proposed in the Welfare Reform and Work Bill will continue this pattern and could put many women and their families at a higher risk of falling into poverty.

3. Scrutiny of the Bill in the forthcoming Parliamentary session must consider the gender impact of the Bill. Ideally the Bill should be subject to a full gender impact assessment which takes account of the cumulative impact of welfare reform to date.

This paper examines the policy proposals within the Bill that could disproportionately affect women and the areas we believe require robust scrutiny to ensure that women are not disadvantaged.

1. Changes to child tax credits

1.1. One of the most significant changes within the Bill is the restriction of child tax credits, and eventually the child element of Universal Credit, to 2 children per family.

1.2. The individual child element of child tax credit for 2015/16 is £2,780 per year. [3] The removal of this level of support could leave families significantly worse off.

1.3. Given women's greater reliance on child tax credits this will inevitably affect them more and could make it much harder for women in low income households to enter and progress in the workplace.

1.4. The argument has been made that changes to tax credit will be counter balanced by the introduction of the "National Living Wage". However, analysis by the Institute for Fiscal Studies has stated that the gains made through a higher minimum wage for over 25s is "much smaller than the takeaway from tax and benefit changes" and that the 2 are not substitutes for the other as they are targeted differently - tax credits support those with low annual family incomes and minimum wages support those with low hourly wages. [4]

2. Changes to conditionality for carers under Universal Credit

2.1. This is another of the more significant changes that the Bill would implement that will affect women more heavily and requires close scrutiny to ensure that they are not disadvantaged as a result.

2.2. The Bill will increase the level of conditionality for responsible carers of children, who are most likely to be women. The Bill will see those with children aged 3 and 4 eligible for all work related requirements; those with children aged 2 eligible for work focused interviews and work preparation and those with a child aged 1 eligible for work focused interviews. [5]

2.3. These increased levels of conditionality will require parents with small children to attend regular meetings and/or training at the Jobcentre, participate in work experience and actively search for work. The ability to meet these requirements for many will rely on them being able to access suitable childcare. If these changes are to be implemented they must be accompanied by action to ensure affordable childcare is available. If not, the likelihood of parents being sanctioned for being unable to meet the new conditions could be high.

2.4. A recent report from the Fawcett Society looked at the conditionality arrangements of Jobseekers Allowance and found that the required commitments are often "difficult if not impossible for women to comply with" and as a result particular groups of women are exceptionally vulnerable to sanctions. [6] The report went on to recommend that the conditions set out in the Claimant Commitment should take sensible and appropriate account of the impact of caring responsibilities. [7]

2.5. Before any additional conditionality is placed on those with caring responsibilities work must be undertaken to ensure they will not be unfairly punished by a system that fails to adequately deliver for those with children.

3. Full employment

3.1. The Bill will place a duty on the Secretary of State to report annually on progress towards "full employment".

3.2. Getting the right definition of full employment in the Act is crucial. Women are more likely than men to be working part time, in temporary roles and on insecure employment contracts. [8] Women are also more likely than men to be underemployed i.e. working fewer hours than they would like to. [9]

3.3. If these nuances are not considered in the definition of "full employment" we could find that figures being reported to Parliament paint an inaccurate picture of female employment rates.

4. Benefit Cap

4.1. The Bill proposes to reduce the total amount of benefits a couple/ single earner household can claim in 1 year to a maximum of £20,000 outside of London and to £13,400 for single claimants.

4.2. To date the impact of the benefit cap has been limited outside of London, mainly due to lower rents in areas like Wales. This reduction will make it much more likely for families in Wales to feel the impact.

4.3. We know that women are more likely to be affected than men. The DWP's own impact assessment of the original Benefit Cap concluded that 33% of women would be affected compared to 29% of men. [10]

4.4. The Bill also removes the link between the cap and average earnings and the requirement for an annual review. Instead the cap will only need to be reviewed once in a Parliament and any additional review will be at the discretion of the Secretary of State.

4.5. We have serious concerns about these changes. Removing the link with average earnings could see those reliant on benefits struggling to afford basic essentials and the removal of regular reviews could hide the full extent of the impact of the cap.

5. Benefit Freeze

5.1. The Bill applies a 4 year freeze to a range of working age benefits including income support; jobseeker's allowance (JSA); Employment support allowance (ESA); housing benefit; universal credit; individual element of child tax credit; basic 30 hour 2nd adult and lone parent elements of working tax credit and child benefit.

5.2. The is another area of concern given women's greater reliance on benefits more generally but also due to the inclusion of child tax credit, working tax credit and child benefit. These benefits are much more likely to be paid to women - 94% of UK child benefit claims are paid to women [11] and women 80% of tax credits go to women. [12]

5.3. Forecasts from the Institute for Fiscal Studies suggest this means a 4.8% cut in benefits in real terms. [13] Of those affected 7.4 million working families will lose £280 a year on average. [14]

5.4. Low inflation rates could limit the impact of the freeze initially but should the rate of inflation increase the freeze could see families reliant on benefits struggling to keep pace with the cost of living and be at a higher risk of falling into poverty.

Conclusion

This Bill will introduce policy changes that will affect women to a greater extent than men. If this is not considered fully before the Bill is implemented then women will continue to pay a higher price for austerity.

Robust scrutiny and impact assessments are vital, especially in light of proposed changes to the child poverty measure, which could hide the full impact of these changes on low income families and those at risk of, or experiencing, in-work poverty.

Ideally a full impact assessment of the Bill should be carried out prior to it being passed. If this is not possible it’s vital that MPs engage in robust scrutiny of the Bill during its passage through Parliament to ensure the potential gender impact is understood and mitigated.

September 2015


[1] Martinson, J. (2012) "Women paying the price for Osborne’s austerity package" The Guardian, 30th March 2012

[2] Engender (2015) "Women lose in Summer budget" http://www.engender.org.uk/news/blog/women-lose-in-summer-budget-2015/

[3] Explanatory note Welfare Reform and Work Bill 2015

[4] IFS (2015) "Benefit changes and distributional analysis"

[5] A list of what these different conditions mean in practice is available from CAB https://www.citizensadvice.org.uk/benefits/universal-credit/interview/claimant-commitment-what-group/

[6] Fawcett Society (2015) "Where's the Benefit: An independent inquiry into women and Jobseeker's Allowance"

[7] Ibid

[8] Chwarae Teg (2014) "Evidence to NAFW Communities, Equalities and Local Government Inquiry Poverty and inequality"

[9] JRF (2015) "Underemployment by gender over time"

[10] DWP (2013) Welfare Benefits Uprating Bill Impact Assessment

[11] Fawcett Society (n.d.) Benefits. At: http://www.fawcettsociety.org.uk/2013/02/benefits/ via WENWales (2015) "The position in Wales today on Unpaid Care"

[12] http://www.independent.co.uk/news/uk/politics/generalelection/general-election-2015-women-would-suffer-78bn-of-86bn-cuts-to-tax-credits-and-child-benefit-under-tories-say-labour-10227020.html

[13] IFS (2015) "Benefit changes and distributional analysis"

[14] Ibid

Prepared 14th October 2015