HM TREASURY 9
17 March 1998
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WOMEN AND THE BUDGET
The Chancellor today announced a package of Budget measures
which will benefit women. The Chancellor said:
"In the past, the needs of certain groups within society
including people in workless households, low earners,
part- timers, and people with caring responsibilities
have often been ignored. These are all groups in which
women predominate. This Budget helps to redress the
balance by increasing support for these groups."
Harriet Harman, Minister for Women and Secretary of State for
Social Security, welcomed the positive effect the Budget would
have on women. She said:
"These new measures recognise how women's lives have
changed and will help women in the choices they make for
their families. This is a practical framework which
combines opportunities to women who choose to work,
backed up by more help with quality childcare and
benefits for women when they need it most. This is a
Government which is delivering on its promises to women."
Helping people to move into paid work:
There are 1 million more women than men in the poorest 20 per
cent of households. Budget measures, especially the Working
Families Tax Credit (WFTC), will help people in these
households by boosting the incomes of the poorest working
families and encouraging people in workless households to move
into paid-work. Extra help, in the form of the childcare tax
credit within WFTC, will help parents to move into paid work
and to progress up the income ladder. Women make up almost
two-thirds of adults in households gaining more than 5 pounds
a week from measures in this Budget.
- The new Working Families Tax Credit provides a very
significant boost for incomes in poorer working families.
A couple with two young children (under 11) earning 200
pounds per week will be 23.30 pounds per week better off
as a result of measures in this Budget, even before
dynamic effects of people being encouraged to move into
paid work are taken into account.
- The generous childcare tax credit within WFTC provides
significant extra help for parents combining caring
responsibilities with paid work. The credit will meet 70
per cent of eligible childcare costs up to maximum costs
of 100 pounds a week for one child families and 150
pounds for families with two or more children.
- The National Child Care Strategy has already started
delivering with its 300 million pounds out of school
initiative.
- Couples receiving the WFTC can choose to whom the credit
is paid: the mother or the father. No-one will be forced
to transfer money from purse-to-wallet.
- In addition to the measures announced today, the
Government has already started to implement the New Deal
for Lone Parents, which gives lone parents (over 90 per
cent of whom are women) the advice and support they need
in finding work.
Helping part time workers and the low paid:
Women are far more likely than men to have non-traditional
working patterns, working in part time jobs, flexible hours,
or on temporary contracts. Five times more women than men
work part-time (or 45 per cent of women in employment as
compared to 7 per cent of men in employment.) Women are more
likely to earn low incomes than men: more than half women
working full time in the UK earn less than 260 pounds per week
compared with fewer than 3 in 10 men. Government policies,
including measures in this Budget, will target more help
towards the low paid and will improve rights for part-time
workers.
- The National Insurance Contributions package helps those
low earners, over three quarters of them women, who face
marginal deduction rates in excess of 100 per cent due to
the NICs entry fee.
- The National Minimum Wage will be of particular benefit
to women in low paid work. Of the lowest 10 per cent of
earners in the UK, nearly 2/3 are women. The national
minimum wage will help to remove the worst cases of
discrimination, and to promote work incentives.
- Women stand to gain from the introduction of the
part-time workers' directive which aims to bring the
rights of part-time workers more into line with those of
full-time workers.
Helping those caring for children:
The Budget contains a substantial package of measures aimed at
giving children the best possible start in life. A key
element in this is improving support that is given to those caring for
children:
- Increased support for people caring for children from
April 1999 from the 2.50 pounds increase to the eldest
child rate of Child Benefit before any up-rating for
inflation. Over 96 per cent of Child Benefit payments are
currently go to women.
- Increased support for the poorest families with young
children through an extra 2.50 pounds per week for each
child under 11 for recipients of income-related benefits
from November 1998. The Government recognises that it is
harder for parents of younger children to seek paid work.
Removing inequalities in the system
More than 20 years after the introduction of the Sex
Discrimination Act, there are still a small number of rules
which work to the disadvantage of women. This Budget removes
two of these long-held disadvantages from the system:
- Partners of the unemployed who are themselves out of work
(95 per cent of them women) have not had access to
employment programmes on the same basis as the claimant
unemployed. To address this imbalance, the Chancellor
has set aside pounds 60 million from the Windfall Tax
receipts to ensure that partners over 25 have the option
to receive the help they need to get back to work.
Childless partners aged under 25 will be included in the
New Deal. Further details will be set out in due course.
- Changes to the Additional Personal Allowance remove an
inequity from the tax system, which has given the
allowance to men with incapacitated wives and a dependent
child, but denied it to wives in the same situation.
The Chancellor has today announced that the allowance
will be made available to women, on the same basis as to
men, from April 1997.
Overall impact of the Budget on Women:
The following chart (not available in ascii version) shows the
average weekly gain from Budget measures for individuals. It
shows that women tend to gain slightly more than average.
[Figure 1 HMT9.GIF]
Women tend to gain more throughout the distribution because
of:
- increases to Child Benefit, 96 per cent of which goes to
women,
- changes to the MCA relief which affects men more than
women because men tend to have higher incomes.
NOTES FOR EDITORS
1.Figure 1 based on the following numbers:
Average change in weekly income (Pounds per week)
Women Everyone
Poorest 20 per cent 2.80 2.40
2nd 20 per cent 1.40 0.90
3rd 20 per cent 0.80 0.40
4th 20 per cent 0.60 0.30
Richest 20 per cent 0.40 0.30
Average 1.30 0.80
Based on data from the Family Expenditure Survey, uprated to
1998-99 levels. Numbers rounded to the nearest 10p. Assumes
equal sharing of income related benefits. Individuals are
ranked by equivalised household income which takes into
account composition or household, eg number and age of
children.
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