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By Marie Le Conte
ast Wednesday, Chancellor of the Exchequer Rishi Sunak, stood up in the chamber of the House of Commons and set out the 2021 Budget.
In normal years you’d have been forgiven for having glossed over it; budgets aren’t the most enthralling of political events, and the way they are covered is rarely enticing. This year, though, with our economy all but shut down, the buzz around the announcements belied the anxiety felt by workers across the board. Would those on furlough lose their jobs once the scheme was drawn to a close? Would whole industries collapse? And what about working women? According to a report published last year by McKinsey & Co, women’s jobs are 1.8 times more vulnerable to this crisis than men’s jobs.
And while women make up only 39 percent of global employment, they account for 54 percent of overall job losses. So what did this budget have in store for working women in particular?
Well, there wasn’t much on us specifically; across the 107 pages of the Budget, the word “women” only appeared three times. In fact, we may as well start with what wasn’t mentioned; childcare, for example, was left out entirely, despite having become an even bigger issue over the past year.
This matters, as according to research published by Women’s Budget Group, an organisation which scrutinises government policy from a gender perspective, “58% of local authorities expect some childcare providers in their area to shut permanently, 46% of mothers being made redundant said that lack of childcare was a factor in their selection for redundancy, and 72% have worked fewer hours and cut their earnings due to lack of childcare”. Disappointingly, no equality impact assessment - which analyses the impact of policies on different demographics and groups of people - was published by the government either.
It isn’t all bad news, however, especially when it comes to business owners. Here is what you need to know about the Budget as a working woman, with help from Laura Farris. A former journalist and barrister, she became the Conservative MP for Newbury in 2019. She has been the co-chair of the All-Parliamentary Group on Women and Work, which seeks to “examine and debate the role that policy makers can play to deliver gender balance within the economy”, since last year.
There’s a new grant for small businesses
“Women work in every single field and in every single sector.... But when you look, there are certain industries - hospitality, the beauty industry, retail - that disproportionately employ women”, said Farris.
“And so I know, partly from my own constituency [of Newbury], that being able to access grants of up to £18,000 - and that applies to a nail bar or to a hair salon - will feel like a significant amount of money.”
The scheme in question is Restart Grants, one-off payments for “hospitality, accommodation, leisure, personal care and gym businesses”, which will cost a total of £5bn. It will replace the monthly Local Restrictions Support Grants for open and closed businesses, which will stop at the end of this month. The initiative will be administered by local authorities, like the previous Grants scheme, and is expected to help around 700,000 small business owners.
There’s a break on business rates
“Secondly, they don't have to pay business rates until after June, and even then it will be graduated”, Farris explained. The business rates holiday was due to end this month, but will now continue for three more months. From July, only businesses which were forced to shut this year will be eligible for a large reduction in their bills. The relief is being capped at £2m, which will not impact small businesses but will be a blow to big companies with many properties.
Furlough has been extended
“And thirdly, there is the extension of furlough. That's really important too, because for a lot of these places, there will be customers through the door when they're first allowed to open, but some people will still be really nervous. Being able to furlough your staff through those first months of reopening will be really important because they don't have to bring everybody back in, but they don't have to make anyone redundant either.”
The furlough scheme, which pays 80% of employees' wages for the hours they cannot work, will be extended in its current iteration until the end of June. In July, employers will be expected to pay 10% of those hours, then 20% in August and September.
Self-Employment Income Support Scheme grants extended to the newly freelance
Similarly, self-employed workers who were eligible for previous SEISS (Self-Employment Income Support Scheme) grants will be able to claim a new lump sum covering February to April in late April, which will represent 80% of their average trading profit for that period, as calculated from their previous tax returns. Crucially, this will also be available to the newly freelance who have just filed their first tax return, and had not been able to claim the previous grants. This will be good news to the 600,000 or so people who had been left with little support and no income, and had to rely on Universal Credit.
One fifth and final SEISS grant will cover the months from May to September, and will be worth 80% of average trading profits for those who’ve seen a turnover reduction of 30% or more, and 30% of profits for those who’ve lost under 30% of their usual business.
A new visa scheme will make it easier to hire talent from abroad
Thanks to a new plan to fast-track visa applications for people with a job offer from a recognised UK scale-up, potential employees will no longer need to be backed by a sponsor organisation or obtain a third party endorsement to come work in Britain. On top of this, a new Global Business Mobility visa will be introduced by spring next year at the latest, aiming to help overseas businesses establish a presence or transfer staff to this country. The move has been widely seen as especially beneficial to the tech and fintech industries, and will try to mitigate the effects Brexit has had on skilled immigration.
Getting on the property ladder is about to become easier (for now)
If you are planning to buy property soon, you are also in luck, as more 5% mortgages will now be offered, and the stamp duty holiday will continue until the end of June. The move has been a controversial one, however, as critics have said it will only keep pushing house prices up, which it has already been doing for the past few months.
There's a freeze on personal tax allowance
Another interesting change is a freeze of the personal tax allowance until 2025/2026, which is - and this may be surprising - actually quite good news for women, or at least worse news for men.
According to the Women’s Budget Group, who welcomed the move, “63% of the benefit of increases to the personal tax allowance and higher rate tax allowance have gone to men. [...] HMRC’s own analysis indicates that 69% of those brought into the higher tax rate as a result of the freeze are men.”
What this means in practice is that in April 2022, the threshold at which people start paying income tax at 20% is set to increase to £12,570, then will remain the same until 2025/2026. Similarly, the 40% rate threshold will increase to £50,270 at the same time next year, then be frozen.
This will hit middle and high earners more and, given that men are more likely to be middle or high earners than women, is widely seen as quite a progressive policy.
State Pensions will get a boost of 2.5%
From 6 April 2021, pensioners will see a 2.5% increase in their weekly state pension. While this has no direct impact on workers, it does fulfil the government’s ‘triple lock’ commitment to pensioners, which sets out a system whereby state pension must go up by either September’s price inflation, average earnings growth or 2.5% – whichever is higher. Last September inflation was 0.5% and average earnings growth was calculated at -1%. Broadly speaking this means the amount workers are contributing to state pensions may feel like more. Elsewhere, the government has capped the lifetime pension allowance at £1.07m, meaning that if you save more than that into your pension over your lifetime, you’re likely to face a hefty bill when you come to access the money.
The £20 weekly increase to Universal Credit will continue
But only for another six months, with Sunak confirming that the extra premium would stop on 1 October.
Domestic abuse services remain under-funded
Then there is the disappointing news on domestic abuse services. Though Sunak did announce that more money would be going to the sector, charities have said it is only a drop in the ocean. “The £19m announced in the budget today is not enough. Even with the £165m for next year, these figures are nowhere near the £393m needed to keep refuges and community-based services running sustainably”, said Farah Nazeer, the chief executive of Women’s Aid. “This shortfall of over £200 million will mean that women and children will be turned away from the lifesaving support they need.”
Still no provisions for those in precarious work
More broadly, there are concerns that the Budget did not address the precariousness of the situation in which many women have found themselves.
“One of the things that we notice through the women and work APPG is that people who were already in low paid or insecure work - and when I say insecure, I mean their employment status was quite loose, so maybe they were on a zero hours contract or a part time contract, or they were an agency worker, something that was less than a full-time, secure role - were more likely than not to be women. And they were also more likely than not to have had their work affected or to have lost their job”, Farris said. “That really suggests there is a link between more insecure employment and women's unemployment.”
Still, as she pointed out, solving this problem is not up to the Treasury alone, and it will require some more long-term thinking and policies, especially from the Department for Business, Energy and Industrial Strategy. In a way, this sums up the latest Budget rather well; while there was some encouraging news for working women, a number of gaps do remain to be filled.
Despite the word ‘women’ only appearing three times in the 107-page Budget, plenty of policies will affect women workers and business owners.
By Marie Le Conte