Earlier this afternoon the Chancellor of the Exchequer presented her first Spring Statement to the House of Commons. Speaking in response to the Office for Budget Responsibility’s (OBR) economic and fiscal outlook, Rachel Reeves revealed that the OBR had revised down the UK’s growth forecast for 2025 from 2% to 1%. This reduction put the Chancellor on track to miss the fiscal targets that she set herself back in October alongside the Autumn Budget. Consequently, in today’s Statement, she outlined a number of measures designed to grow the economy and ensure compliance with these self-imposed fiscal rules.

While we appreciate the challenging geopolitical and economic developments that have occurred since the Autumn Budget, we are concerned that the Chancellor’s emphasis on meeting her fiscal rules and the actions taken to safeguard these will disproportionately and detrimentally impact women in Wales.

Social security

As announced last week in the Pathways to Work: Reforming Benefits and Support to Get Britain Working Green Paper, the UK Government plans to grow the economy by reforming social security for ill and disabled people. While some of the announced proposals are welcome, the proposed cuts and tightening of eligibility for the UK’s two main disability benefits, Personal Independence Payments (PIP) and the healthcare element of Universal Credit, are deeply concerning. These proposals were reiterated in today’s Statement alongside the announcement that health element of Universal Credit rate will be halved and frozen for new applicants. As detailed in our policy paper Far From a Vital Safety Net: Benefit Conditionality, Sanctions and Women in Wales, benefit cuts and conditionality are ineffective at moving claimants off benefits and into long-term, sustainable employment. Instead, they have been found to trigger a number of negative personal, financial and health-related outcomes, all of which are set to fall on the poorest and most vulnerable claimants as a result of these proposals.

In Wales, where the disability employment gap is consistently higher than elsewhere in the UK, the impact will be particularly acute, exposing Wales’ 275,000 PIP claimants and 110,000 claimants of the Universal Credit health element to increased hardship and poverty. Women in Wales will be hit particularly hard – both as claimants and unpaid carers – by these proposals. The majority of disabled people in Wales are women, and women are also more likely to take on or increase unpaid care for family members whose benefits are stripped back. The Chancellor estimates that these changes will contribute £4.8billion to the UK economy. However, rather than growing the UK economy, the changes to disability benefits are likely to push more women out of the workforce, adding to the 25.2% of economically inactive women who are out of work due to caring responsibilities in Wales. This will not only reduce incomes and tax revenues but will further entrench gender inequality across the UK.

Defence

Arguably, the cornerstone of the today’s Statement was its increased investment in defence spending. Justified on the basis of growing geopolitical instability, the Chancellor confirmed that the Government will spend 2.5% of GDP on defence by 2027 and invest an additional £2.2bn in defence from next year. While this investment will not directly disadvantage women in Wales as the above social security reforms, women are less likely to see direct benefits of the jobs and opportunities it will provide. As a gendered employment sector with more male than female workers, increased funding for the defence sector will disproportionately benefit men in Wales. Furthermore, the Government’s choice to fund this investment by cutting foreign aid to 0.3% of GDP will entrench global gender inequality, particularly by abandoning the women and girls across the globe facing poverty, conflict, who rely on this aid as a lifeline.

In today’s Spring Statement, the Chancellor prioritised compliance with arbitrary fiscal targets and defence spending. To do so and in an attempt to grow the UK economy, she outlined a number of proposed reductions in social security support for ill and disabled people. In Wales, these reforms will hit women the hardest. There were – and remain – alternative, fairer ways for the Chancellor to grow the economy. These include, for example, tackling the gender employment gap, and other progressive forms of taxation and by allowing for more flexibility in meeting the Chancellor’s self-imposed fiscal rules. Today’s Statement represents a regrettable missed opportunity to do this and to adequately support women across the UK.