George Osbourne has made a U-turn on his tax-credits decision and has announced the “tampon tax” will now go towards supporting women’s charities.
The Chancellor of the Exchequer used his combined Autumn Statement and Spending Review today to lay out the government’s spending plans for up to 2020.
Women’s security and financial independence in the UK was under question as Osborne contemplated tax credit cuts.
Heated debates over cuts to tax credits took place last month and were opposed by the Tory-majority and the Work and Pensions Select Committee. Former Labour Prime Minister Gordon Brown, introduced tax credits in 1999 during his time as chancellor.
In his review Osborne said he could abandon the controversial cuts of £4.4bn due to improvements in public finances but announced plans for £12bn to welfare cuts including a new cap on housing benefit in the social sector and removing pension credits to those people who have permanently left the country.
Osborne said: “I’ve had representations that these changes to tax credits should be phased in. I’ve listened to the concerns. I hear and understand them.
“And because I’ve been able to announce today an improvement in the public finances, the simplest thing to do is not to phase these changes in, but to avoid them altogether. They are being phased out anyway when the universal credit comes in.”
There are two types of tax credits: Working Tax Credit (WTC) for those in work, and Child Tax Credit (CTC) for those with children. Tax credits are gradually being included within Universal Credit, which is being rolled out across the country.
A recent report by the LSE’s Commission on Gender, Inequality and Power found that 78% of cuts to welfare are paid by women. The report found that women account for 65% of public sector workers, where wage increases are set to freeze at 1% for the next four years. In addition 93,000 more young women were found to not be in employment, education or training compared to young men.
According the LSE the gender pay gap remains at 19.1% for both full and part time employment combined, which is the sixth highest in the European Union. Women make up just 36.7 per cent of full time workers and 73.9 per cent of all part time workers in the UK. The report states that is will take 50 years to eliminate the gender gap for full time female workers and 300 years for part-time workers.
Tampon Tax to support women’s charities
Osbourne’s decision not to scrap tax credits comes as fears rose over effect of austerity measures on domestic violence services.
Today Osbourne announced that until a decision is reached on the debate over the removal of the 5% VAT on sanitary items, that the tax will be injected into women’s charities.
Labour MP Paula Sherriff led the charge to cut the 5% VAT rate, however David Cameron previously pointed out that the European Union sets the rules which are difficult to overturn.
So far 300,000 people have signed a petition calling for the removal of the tampon tax.
Osborne said: “The government wants to change the EU law and abolish it all together, but until then, the £15m raised from the tax will go to women’s charities.”
He said “there are many charities that support vulnerable women” and the savings should go towards such organisations.
Today Human Rights Minister Baroness Anelay spoke of the urgency to end violence against women, to mark the launch of the 16 days of activism campaign. International Day for the Elimination of Violence Against Women is a UN initiative to emphasise how female-focused violence is on the rise.
Anelay noted that globally 35% of women and girls will experience some form of physical or sexual violence during their lifetime and that more than 700 million women alive today were married as children: “250 million of them were married before the age of 15 and it is estimated that worldwide, over 130 million women and girls have been subjected to female genital mutilation.
“Ending this violence against women is a matter of the utmost urgency.”
Discussing the 16 Days of Activism campaign she said: “At the root of the abuse women experience – both in peaceful societies and in those struggling with the chaos of conflict – are often ideas of women as second class citizens; as objects or property controlled by men. While such attitudes are notoriously difficult to change, education is the key. I am pleased that this year’s 16 Days of Activism against Gender-Based Violence campaign, which also starts today, focuses on the issue of education.
“The International Day for the Elimination of Violence Against Women, and the 16 Days campaign continue to educate us all on why we must push ourselves to do more. They inspire us with examples of leadership, courage and innovation which are changing the lives of vulnerable women and girls every, single day.”
According to Women’s Aid, a national charity working to end domestic violence against women and children, 31% of women were turned away last year due to lack of space. In one week alone in 2014, 369 women were turned away from outreach services.
January saw LGBT domestic violence service Broken Rainbow call for government funding for a further 12 months after it announced that its helpline was facing closure.
Furthermore, women’s charity Eaves closed after 40 years of service after facing government cuts. The charity offered support to women escaping domestic violence and victims of trafficking. It was set up to help vulnerable women facing homeless due to cuts in legal aid and uncertain immigration status.
Child Care Costs
Osbourne also announced today from 2017, 30 hours of free childcare for three and four-year-olds, will be available but only to parents working more than 16 hours a week and with incomes of less than £100,000.
Osbourne said it will total a “£6bn child care commitment to the working families of Britain.”
Osborne said the government’s total spending will be £756bn this year, rising to £773bn next year, £787bn the year after, £801bn in 2018-19 and £821bn in 2019-20