WBG Warns of 13% Drop in Black and Asian Women’s Living Standards, Pressing for Urgent Government Action

Women from Black and Asian backgrounds will suffer a 13% decline in living standards as a result of tax and benefit changes and public spending cuts since 2010, equivalent to £5,399 per year for Black women and £4,259 for Asian women, reveals new research from the Women’s Budget Group (WBG).

In light of these findings, the feminist economics think tank is calling on the new government not to delay investment in social infrastructure and to restore the social security system to adequate levels. WBG warns that without intervention, vulnerable women across England, including Black, Asian, and Minority Ethnic women, will endure even greater financial hardship towards the end of this parliament.

These findings are part of a new report titled “Where do we go from here?” released today by WBG that sheds light on the impact of 14 years of austerity on women. The report looks at the combined impact of changes to tax and benefits plus changes to public services from 2010/11 projected to 2027/28 broken down by gender, income, race/ethnicity, disability and household type.

Key findings

• Women from Black and Asian backgrounds experience an average drop of over 13% in living standards, compared to 8.9% for Asian and Asian British men and 8.2% for men from Black, African, Caribbean and Black British backgrounds.
• In cash terms, Black, African, Caribbean, and Black British women experience a cut of £5,399 per year, and Asian and Asian British women £4,259.
• Although less in percentage terms, women from mixed and multiple ethnic groups and other ethnic groups also lose around £4,300 per year. For White women, the drop in living standards is 8% (£2,687 per year in cash terms). White men lose around 5% (£2,150).
• The poorest women experience a greater reduction in their living standards than men, around one-fifth (20%). This is more than the losses the poorest men face in every ethnic group, except for men from multiple and mixed backgrounds, who lose 23%.
• There is a clear correlation between income level, gender and the extent of the decline in living standards. Across all ethnic groups, those with lower incomes suffer the most from cuts, and in most groups, women experience greater losses than men.

Figure 1. Impact of changes to social security, taxes and public service spending from 2010/11 projected to 2027/28 by sex and ethnicity.

Other key findings:

• Ethnic groups that have suffered the most from austerity cuts are among the ones with the highest poverty rates. For people living in households where the head of household is from a Black, African, Caribbean or Black British ethnic background, the poverty rate is 40%. For ‘Other’ ethnic groups it is 39% and for Asian and Asian British it is 36%, much higher than the 19% for people living in households where the head is from a White ethnic background ¹ .
• Changes such as the introduction of the benefit cap and the two-child limit have had a more significant impact on Black and minority ethnic groups, who are more likely to have larger family households ² and dependent children ³ . Families with three or more children lose, on average, nearly £2,000 per year just as a consequence of the two-child limit ⁴ .

Ignacia Pinto, Senior Research and Policy Officer at WBG, said,

“Today’s findings reveal how austerity’s impact is shaped by the intersecting forces of income, gender, Disability, and race and ethnicity. If the Government doesn’t take action now and commits to significant investments in our social infrastructure and restore our social safety net, Black, Asian and Minority Ethnic Women will be 13% poorer towards the end of this parliament than they were when Labour was last in office.

“These findings build on our earlier joint report with the Runnymede Trust that showed the disproportionate impact of austerity cuts on Black and Ethnic Minority Women—seven years on, our warnings have become a stark reality.

“However, this must not become a pattern. The new Labour Government has the opportunity to protect those who have borne the brunt of 14 years of reckless underinvestment by previous governments. Without action to restore living standards and rebuild our social infrastructure, inequalities based on gender and race/ethnicity will become even further entrenched.

“For years, we’ve called on successive governments to properly assess the impact of their policies on different social groups. Once again, our research shows how vital it is to evaluate and disclose how policies uniquely affect women and ethnic minorities. The upcoming Budget presents a critical opportunity for Chancellor Rachel Reeves to lead by example and set a new course.”

Dr Shabna Begum, CEO of Runnymede Trust, said,

“This report makes clear the racialised and gendered nature of hardship and suffering that is inflicted by austerity.

The conditions that have kept so many women of colour in poverty have been manufactured through policies designed and delivered for decades now, by successive governments. There can be no plea of ignorance, or denial of the harm that is inflicted – the numbers are stark – women of colour are losing more money, every year. For Black women this can mean over £5000 less per year and contributes to a 13% depreciation in their living standards. Many of these women have borne the brunt of multiple and intensifying crises over the last few years and it is simply untenable to expect that these hardships can be suffered for longer.

“It is urgent that the new government recognises this profound and ongoing harm and addresses the issues in their upcoming budget with policies that can correct the inequalities that are confirmed here.”

Based on today’s findings, WBG calls on the new Government to

• Make substantial changes to the social security system including
  • Increasing the real value of benefits and retaining regular uprating of social security benefits to at least match cost-of-living increases.
  • Abolishing punitive policies such as the two-child limit, the benefit cap and the ‘No Recourse to Public Funds’ condition, ending the Universal Credit five-week wait and introducing a second-earner work allowance.
  • Abolishing the High-Income Child Benefit Charge and increase Child Benefit to £50 per child per week.
  • Raising the Local Housing Allowance to the 50th percentile of rents with regular uprating to continue to match local average rents.
  • Retaining PIP and related disability benefits as cash payments and as a vital contribution towards the additional costs of disability.
• Introduce fairer taxes to increase revenue such as equalising Capital Gains Tax and Income Tax rates, and introduce taxation of wealth.
• Invest in public services to promote gender equality, including prioritising the building of more social housing, and increase public service spending to at least pre-austerity levels.

ENDS

Notes to the editor

• Full report available to read here.
• This report examines the cumulative impact of changes to social security, taxes, and public service spending between 2010/11 and 2027/28 in England. It is an update on our previous work in 2017 with Runnymede Trust, which focused on the impact of austerity on Black and minority ethnic women in the UK (Intersecting inequalities: The impact of austerity on Black and Minority Ethnic women in the UK).
• Microsimulation and distributional analysis by Howard Reed, Landman Economics.
• For this report, living standards were measured by combining net income with the cash-equivalent value of public services. This method acknowledges that living standards depend not only on financial resources but also on the availability and access to essential services such as transport, health and social care, and education.
• To arrive at the figures, we compared two scenarios: one with the impact of policy changes as they have happened since 2010 and are planned until 2027/28, and another hypothetical scenario as if those changes hadn’t happened. All monetary values are in April 2024 prices.
• For further information, please see the Methodology Appendix and the Technical Note.

Spokespeople from WBG and Runnymede are available for interviews.

Please contact

Viktoria Szczypior at press@wbg.org.uk / viktoria.szczypior@wbg.org.uk / 7553663144

About the Women’s Budget Group

The UK Women’s Budget Group (WBG) is the UK’s leading feminist economics think tank, providing evidence and analysis on women’s economic position and proposing policy alternatives for a gender-equal economy. We act as a link between academia, the women’s voluntary sector and progressive economic think tanks.