NIWBG Response to the Spring Statement

On Wednesday, the Chancellor for the Exchequer presented the Spring Statement, also known as a ‘mini-budget’, to Parliament. The headline announcements saw cuts/changes to benefits and increases to defence spending - this is not a Budget that will work for women. 

In the Economic and Fiscal Outlook - March 2025 report from the Office for Budget Responsibility (OBR), the forecasted GDP growth for 2025 was downgraded to 1% from 2% last October. This prediction, as well as the Chancellor’s commitment to staying within the self-imposed fiscal rules, clearly influenced the content of the Statement. There can be no guarantee that the OBR’s forecast will not continue to change in response to our increasingly uncertain world. However, it is certain that decisions announced in the Statement will harm women, particularly women with disabilities and/or in poverty, in Northern Ireland. 

Social Security 

Raised in the Pathways to Work: Reforming Benefits and Support to Get Britain Working green paper the week before the Statement, the Chancellor proposed changes to eligibility and cuts to the two main disability benefits in the UK: the Personal Independence Payment (PIP) and the health element of Universal Credit. While we welcome the increase of the Universal Credit standard allowance from £92 in 2025-26 to £106 to 2029-30, we are deeply troubled by the decision to freeze the Universal Credit health element for existing claimants until 2029-30, the reduction of this element for new claimants to £50 in 2026-27, and the freezing of this rate of pay for new claimants until 2029-30. Additionally, the Chancellor made the choice to introduce additional eligibility requirements to PIP assessments, despite research showing that women and older people are most likely to have negative impacts on their mental health following PIP assessments. 

These changes will have a disproportionate impact in Northern Ireland as there are more people living with a limiting long-term health problem or disability (24.3% or 463,000 people) and more people claiming benefits than in England, Scotland, and Wales. Higher rates of long-term health problems and disability are also linked to the legacy of conflict in Northern Ireland, where areas that saw a greater level of conflict have higher rates of people claiming PIP. 

This will also greatly impact on gender equality in Northern Ireland, as more women reported having long-term health problems or disabilities than men, and women are more likely to claim benefits than men. Therefore, the impacts of this decision will only bring women further into poverty. Government is aware of this and is still moving ahead with the cuts/changes: the overall impacts on poverty were noted in the equality impact assessment for the document, where the government concluded that these decisions would drive a further 250,000 people into poverty, including 50,000 children. 

Unpaid carers, the majority of whom are women, will also face indirect negative impacts from the proposed changes to PIP and the Universal Credit health element. The eligibility changes to PIP means that 150,000 carers across the UK will lose their eligibility for Carer’s Allowance. This is a significant setback from announcements made by the Chancellor regarding Carer’s Allowance last October and will only result in hardship for carers. 

The Chancellor’s proposed changes are predicted to save the UK Government £4.8 billion by 2029-30, but the cost of these impacts will have financial consequences that will rival the money saved over the course of the next five years. One report suggests that with the additional burden on the NHS and reduced spending for struggling households, the actual amount saved will only be about £100 million - a mere 2% of the savings proposed by the Chancellor. People with disabilities and carers deserve better, and the higher rates of women represented in both groups limits the progression of gender equality aims in Northern Ireland. 

Defence Spending

One of the main headlines to come from the Spring Statement is the Government’s decision to increase defence spending by 2.5% of GDP by 2027-28 and inject a further £2.2 billion into the defence budget in the next financial year. It is clear that this is in response to increasing uncertainty at the global level, and the Chancellor reiterated that, “As defence spending rises, I want the whole country to feel its benefits.” However, it is unclear how the ‘benefits’ will be felt by women in Northern Ireland. 

Defence is a reserved matter, meaning that it is the responsibility of the UK Government, not the devolved governments. Because defence is reserved, spend in that area does not factor into the Barnett Consequentials, or the formula that determines how much money Northern Ireland receives through the Block Grant. Therefore, the increase to the defence budget does not mean an increase to Northern Ireland’s Budget. Additionally, defence contracting is a male-dominated field - an increase in investment in this sector will not bring benefits to women in Northern Ireland - working or not. 

It is also disappointing to see Government follow the likes of the United States, The Netherlands, and Sweden by cutting foreign aid to 0.03% of GDP. This will undoubtedly contribute to rollbacks on gender equality achievements worldwide. 

Conclusion

Responding to the OBR’s changes to predicted GDP growth with decisions that will drive the most vulnerable in our society into poverty is not a sign of maintaining a ‘healthy’ economy. While the announcement on Wednesday was greatly disappointing, we will continue to advocate for budgets that work for women as we believe this Government has the potential to utilise fiscal tools to promote gender equality aims.