Published: 23 November 2023 at 01:00
VIEWPOINT: Three economists explore potential impact of Jeremy Hunt's statement
By Sarvin Hassani, Laura Muncey and Denise Hawkes, Anglia Ruskin University
This year’s autumn statement was announced by the chancellor, Jeremy Hunt, on Equal Pay Day – the day that UK women stop being paid when compared with men’s wages, due to the gender pay gap. It’s fitting then that the statement included some measures that could help working women – but in other areas, the government still isn’t going far enough.
It’s important to view economic announcements through a gender lens. We are three economists based at the Centre for Inclusive Societies and Economies, a research centre focused on developing inclusive economic models.
Traditional models of the economy were developed before mass female engagement in the labour market. Newer, more inclusive models better represent women’s experiences in the economy. It’s essential that women’s experiences are considered when setting economic policy to ensure it is fit for purpose.
There are three main areas in which major announcements were made by Hunt that could affect UK women. Among some positive developments, there is still much to do on issues such as equal pay, the gender gap in pensions savings, and equality in industries such as science and technology.
As part of Hunt’s plan to “turbo-charge” the UK economy, the autumn statement focused on growth. Investments in NHS, social care and education workforce skills will help productivity.
The statement also promised £50 million for apprenticeship schemes in engineering and other key areas of labour shortage. And there will be a £4.5 billion fund available for manufacturing over the five years to 2030, covering important UK industries such as aerospace firms, life sciences (medical research), and the green industry.
The chancellor also repeated the government’s aspiration for the UK to become an “AI powerhouse”, and is pumping £500 million into “innovation centres” over the next two years to achieve this. A plan to reverse the downward trend of foreign direct investment in the UK will involve establishing a “concierge service” for large international investors, to encourage more spending by non-UK firms and, hopefully, an increase in jobs.
The significant investment awarded to building skills and innovation in the autumn statement also built on the childcare funding announced in the spring budget, which aims to support working parents. But if these financial plans are to help women too, the real challenge will be in enabling the social change needed to ensure women have fair access to roles in these male-dominated industries.
Women make up only 31% of all core STEM university students in the UK, and this drops to 21% in engineering and 23% in computer science. Any plan to boost UK productivity and growth through these industries must ensure enough women have access to these new engineering apprenticeships and benefit from the investment in innovation centres. This will help ensure gender diversity when UK companies are creating solutions to important global issues such as the effective use of AI.
To “back our pensioners”, the chancellor announced that he would remain committed to the pensions “triple lock” in the autumn statement. This is a commitment to raise state pension payments annually every April by the highest out of average annual earnings growth (from May to July the previous year), inflation (using the previous September figure), or 2.5%. Earnings growth was the highest this year, so from April 2024 the full state pension will rise by 8.5% to £221.20 a week, worth up to £900 more a year.
Read more: Inflation may be coming down but its unequal effects can still have a big impact on wellbeing
This will help pensions keep pace with inflation, which has been at record levels for much of the past year. But the focus on the triple lock obscures the real pension reform needed to address the gender gap in pension saving.
More women are pensioners than men and yet, often due to complex National Insurance contribution rules, they are less likely to receive a full pension. The pension gap is also evident in work-based pensions, where pay inequality means pension contributions are lower for women.
Fair and inclusive pension reform will ensure a full state pension for all and make a significant contribution to addressing pensioner poverty.
National Insurance (NI) rules are not just complex for pensioners; they often cause headaches for the self-employed too. The removal of the Class 2 contributions in the autumn statement, and the reduction of Class 4 NI by 1p, means more money for the self-employed. “These reforms will save around 2 million self-employed people an average of £350 a year from April,” Hunt said in his speech to parliament.
And it could help revive a part of the economy that was hit hard by COVID. Self-employment was growing steadily in the UK, hitting a peak of 5 million at the start of 2020. But since then, the number of self-employed has fallen back to mid-2015 levels.
With women making up almost half of the freelance workforce – and 15% of freelancers are working mums – these reforms will help support a growing number of self-employed women to make their businesses work.
Laura Muncey, Sarvin Hassani and Professor Denise Hawkes, Faculty of Business and Law, Anglia Ruskin University
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