Beyond the higher-spending headlines, the UK Budget will do little to address the deepening inequality that disproportionately impacts women, finds Sara Cowan.

What Labour’s UK Budget means for women in Scotland

The Budget delivered on 30th October by the UK’s first female Chancellor offered an important step change following fourteen years of austerity. Vitally, the Chancellor called out the need to ‘invest, invest, invest’. Our public services sorely need this after years of real-term cuts and constrained budgets. However, the levels of investment did not meet the levels of demand that austerity has brought, and for one group in society – those reliant on social security benefits – austerity remains. Our sisters at the UK Women’s Budget Group have shared their detailed reaction highlighting the promising green shoots of change but the need for greater ambition on both changes to taxes and levels and areas for investment.

The headline figures for Scotland see an additional £1.5 billion spending power in the current year’s budget, almost fully in the form of additional day to day spending. To put that in context, the in-year reductions announced by the Cabinet Secretary for Finance in September amounted to almost £1 billion. With a further £3.4bn coming to next year’s Scottish budget,¹ it is critical that it is invested in both physical and social infrastructure to support all aspects of our economy. Alongside roads and public buildings, services such as education, health, social care and childcare should be recognised for the critical role they play in our economy.

The UK Budget set a rise to the national living wage of 6.7% to £12.21 for workers over 21. Women are more likely to be in low paid employment and in Scotland make up 72% of those paid below the real living wage,² so the change to the national rate is important. However, it’s necessary that the Scottish Government continues to support delivery of a real living wage to workers in Scotland as part of the process of ensuring fair work that pays.

There was disappointingly little change to social security with policies like the two-child limit and the benefits cap remaining in place, and no mention of a review of thresholds for accessing means-tested support as we called for in our Women’s Survey 2024 report. More positively, the changes to the maximum amount that can be taken from benefits to repay debt was a step in the right direction. However, the uplift of 1.7% to benefit rates alongside maintaining the sanctions regime gives little room for optimism for those who require support from the social security system. The Office of Budget Responsibility predict that inflation will reach 2.6% in 2025, meaning living standards will continue to drop for those on social security.  Women are more reliant on social security due to undertaking more unpaid care work. We need to see change at the UK level to ensure there is a safety net that provides people with the essentials of life. Action in Scotland is vital to provide additional support, including raising the Scottish Child Payment to reach £40 per child per week within the lifetime of this parliament, and, at a minimum, matching changes to Carers Allowance in the new Carers Support Payment in Scotland.

Choices on raising revenue were a mixed bag and manifesto commitments had limited the options available to the Chancellor. To tackle gender inequality and invest in quality public services, Government needs to raise more revenue. How this is done is critical to its ability to tackle inequality.

Raising employer National Insurance Contributions is expected to increase the costs of employing low earners, This is likely to disproportionately impact women, and to particularly impact essential sectors like social care and childcare which have many low-paid, mainly female workers.³ The Coalition of Care and Support Providers in Scotland raised the alarm following the budget, drawing attention to the implications that this could have for the provision of formal care.⁴ In turn this could see increasing demands placed on unpaid carers, the majority of whom are women. At time of writing, it was not yet known what additional funds would come to Scotland to support the public sector to cover this rise, and whether Government support would be extended to commissioned services. However, Scotland has a larger public sector than elsewhere in the UK and if full costs are not provided the Scottish Government will have less flexibility to invest additional money coming to Scotland. The changes to the rate of employers’ NI contributions will also severely impact the third sector, already drained by the impact of standstill and/or insufficient funding at a time of increasing demand. With more women being employed in the third sector,⁵ the repercussions of this decision will be far reaching.

As a final point, the UK Budget took important albeit small steps to increase taxation, including the taxing of wealth through changes to Capital Gains Tax and a 50% increase in air passenger duty for private jets. This should set the tone for the Scottish Government to use powers available to it to raise further revenue in Scotland and to work to tackle inequality through options at its disposal, including the need for a revaluation of property rates on which Council Tax is based, and a private jet tax embedded as part of an operational Air Departure Tax.

The UK Budget needs to mark a step change towards public investment in better outcomes for people. We require decisions that advance equality and provide funding to end austerity. Next Spring’s UK Spending Review will need to set out the longer term focus to give clarity to Scottish and, in turn, to local government on spending beyond a one year budget cycle. Meanwhile, in the coming year we need to see, from local to national budgets, investment in vital services including care services, as well as a genuine safety net for those who need it.

Sara Cowan is Director of the Scottish Women’s Budget Group, an organisation which campaigns and provides training to deliver a gender equal economy.

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1. Fraser of Allander (2024) UK Budget: FAI Reaction ↩︎
2. Joseph Rowntree Foundation (2023) Poverty in Scotland 2023 ↩︎
3. Women’s Budget Group (2024) Response to the Autumn Budget 2024 ↩︎
4. “Civic society – and the people it serves – must be respected as an equal partner in public service” | Coalition of Care and Support Providers in Scotland ↩︎
5. Open your eyes to gender inequality – Third Force News ↩︎