Childcare costs and Universal Credit hit the poorest women hardest

Women and people with disabilities are disproportionately disadvantaged by UC

‘If you’ had got a group of misogynists in a room, and said “guys, how can we make this system work for me and not for women”, they wouldn’t have come up with too many better ideas than what’s in place’. So said Philip Alston, UN Rapporteur into Extreme Poverty and Human Rights, on 16 November as he concluded his two-week tour of the UK, recognising the disproportionate impact of eight years of austerity measures on women. He was clear it has not been a solely economic question but rather ‘radical social re-engineering’ by a government determined to spread the ‘values’ of individual responsibility and work. His report concluded what working-class women and women’s charities have been saying for years – that austerity is an attack on the poorest, particularly women and children, whilst benefitting the wealthy. Alston in­evitably concludes that it a case of a lack of compassion and a state of denial by the government that could be remedied with some policy reform. Instead, the reports by women’s groups on childcare costs and Uni­versal Credit (UC) that have accompanied his visit make it very clear that the situation is drastic and needs a commensurate response.

Rising childcare costs and child poverty

Childcare costs have risen dramatically and have disproportionately affected parents on benefits or receiving lower wages. Analysis published by the Trades Union Congress (TUC) in September 2018 showed that in the past decade costs for working parents have increased by 52% compared with an average wage increase of 17% in the same period. For single parents, the majority of whom are women, childcare costs have risen seven times faster than earnings. A Conservative scheme introduced in 2017 offering working parents up to 30 hours ‘free’ term-time childcare for three and four-year olds was the promised solution. However, nurseries have not received adequate funding for the places, forcing them to raise fees and so exacerbating the problem. 53% of private nurseries, along with 28% of school nurseries, have increased their fees in the last 12 months. Nurseries warned that fee increases would be inevitable and would hit parents on lower wages hardest – and the full effects are starting to be felt now. The ‘free’ childcare comes with hidden costs – 42% of childcare providers are charging for ‘extras’ which include lunch, snacks and nappies. The wealthiest benefit, able to afford the extras and fee increases whilst benefiting from the hours – parents earning up to £100,000 each can take advantage of the scheme. 58% of families earning at least £45,000 have taken up the offer, whilst only 26% of those earning under £20,000 have registered for the free hours. For many, the costs still outstrip wages – not only is it not ‘free’ it is simply unaffordable. For working class women it means debt, an ever-increasing reliance on family and friends. It is stressful and exhausting, trying to find the least bad option. It looks set to worsen for the women most in need – the most deprived areas of England have seen the number of available childcare places fall by more than 20% over the last five years, whereas the least-deprived areas have seen places increase by a third.

Universal Credit

Alston argued that Universal Credit was ‘fast falling into universal discredit’ due to its unwieldy implementation, draconian sanctions and it pushing people further into poverty. He failed to recognise the fact that stark warnings were issued by women receiving benefits and women’s charities, particularly domestic violence services, prior to the scheme’s roll-out, who were clear that UC could only ever be an attack on the poorest women. Introduced in 2013, reportedly to simplify the benefit system, tackle poverty and improve employment, in practice it has meant the opposite – drastic benefit cuts via a complex, often inaccessible system with sanctions at every turn.

UC expects parents to cover upfront monthly childcare costs, and then ‘repays’ 85% of this. Upfront fees can be as much as £1,500. For many, this is an impossible amount of money to pay in the first place – even if it can be scraped together, the failing system often takes months to repay parents who are forced to borrow from family and friends or loan companies. The poorest families are expected to pay in arrears, whilst the government’s scheme benefiting wealthier parents provides its funding upfront. Privilege begets privilege.

Despite the problems with UC, for many working-class women it is the only option because work simply doesn’t pay once childcare costs are considered. Women have reported wanting to return to work but said that this would leave them without money to cover housing or food costs. This is becoming increasingly true even for better-paid jobs because of the rapid rise in childcare costs – Thuto Mali, a mother living in north London, found moving off UC would leave her with £2 a day to live on because of childcare fees and losing rent support – despite a salary offer of £32,000 (Evidence given to the Commons Work and Pensions Committee, 24 October 2018).

Poverty

The result of such a toxic mix is rising poverty for families, particularly single working-class women with young children.  Alston’s report condemns the shocking rise in child poverty in the UK, describing the social support changes as having a ‘disparate impact on children, including the deeply problematic two child policy, the outrageous rape exception, and the benefits cap’.  The two child policy restricts child tax credit to two children, with the ‘rape exception’ demanding that women who have a subsequent child by rape give extensive proof that they were attacked. We have reported on each of these issues in previous issues of FRFI, and shown that the poorest face the most severe losses, insecurity and inhumanity – and that inequality will rise. Alston’s report states that child poverty is set to increase by 7% between 2015 and 2022, taking levels to 40%.

Overall, Alston found unsurprisingly that the cuts to services and rising costs have left working-class women to fill the gaps. Women from Newham, east London told Alston how they were struggling to survive, relying on food banks to feed their young children, some trapped because of UC in abusive relationships, others forced to sell sex. Women read Alston the names of people who have died as a result of cuts and sanctions. Despite such a desperate situation, Alston is optimistic in his report that ‘the good news is that many of the problems could readily be solved if the government were to acknowledge the problems’ and consider his recommendations. Far from acknowledging the problems Amber Rudd, who was sacked from the cabinet in April for lying to parliament over Windrush, in her first public appearance as Work and Pensions Secretary derided the report for its ‘extraordinary political language’ stating that the government ‘strongly disagreed’ with the report. The report’s recommendations if enacted would of course be a welcome change – more funding, fewer sanctions, an end to delays for UC payments. However, all the reports and recommendations have offered working class women too little for too long. It is ever more urgent we come together to speak out – to organise and resist.

Rachel Francis

Fight Racism! Fight Imperialism! No 267, December 2018/January 2019

 

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