Since the referendum on EU membership took place in June 2016, it is estimated that Britain has been spending over £440 million each week on Brexit preparations, or £23 billion a year, a cost that has resulted in a loss of 2% to the economy.
This week, the deadline to leave was extended for a second time to avoid the potential catastrophe of a no deal Brexit, giving the UK until October 31st to agree on withdrawal terms. Beyond this date, depending on the kind of deal that is reached the government’s own research predicts Brexit will cause a loss of between 0.6% to 9.3% to GDP. Analysis by the Women’s Budget Group has found that women will be impacted disproportionately harder than men.
The expert’s view
Dr Mary-Ann Stephenson is the Director of the Women’s Budget Group, a thinktank that scrutinises the government’s economic policy from a gender perspective.
The unique impact on women
“Men and women will be affected differently because they work in different sectors. There’s been a lot of attention on sectors which largely employ men, particularly motor manufacturing which is already taking a hit – we’ve seen this week Jaguar Land Rover has suspended production at their plants as a result of Brexit. But there are other sectors where women predominate which are likely to be badly affected. Healthcare is one of them; although the health service doesn’t export to the EU it relies a lot on inputs like pharmaceuticals, medical equipment and also EU staff.
There is a large number of EU citizens working in the health service. If they have to leave the UK, or decide to leave – as it seems many of them are because of uncertainty and because they no longer feel welcome – that will create a strain on the health service, which is which far more likely to employ women then men. Some people have argued this will create more opportunities for British women, but actually we already have a recruitment crisis. It is not that British women are desperate to take these jobs and can’t get them, it’s that it’s very difficult to recruit for these jobs. We’ve got a skills shortage, so what will actually happen, particularly in the short term, is increased pressure on the staff that remains. Then there are sectors like textiles and footwear which have a predominantly female workforce that are heavy exporters to the EU.
It’s worth pointing that the focus of Theresa May’s deal is primarily around getting a free trade agreement on goods. The majority of women work in the service sector, which is going to be badly affected whatever form of Brexit we have.
Brexit will also affect women differently because of the impact on household budgets if the price of food goes up. Women spend more of their income on food, they are what we call the “shock absorbers of poverty”, and are more likely to go without food, clothing or heating for themselves in order to shield family members from the impact of poverty.
We’ve got very clear evidence that cuts hit poor people harder than rich people, they hit women in every income group harder than men, and they hit black and minority ethnic women and disabled women hardest of all. There is very little doubt that if there are further cuts it will be women who bear the brunt, and that’s because they are more likely to use public services both for themselves and their families. They’re more likely to work in the public sector, and to have to increase their unpaid work when services are cut. If childcare provision or adult social care provision is cut it is often women who end up having to reduce their paid work to care for children, sick or elderly relatives.”
Women’s charities and social services
“We did a report called Life-Changing and Life-Saving about the women’s voluntary sector where we looked at what would happen with the EU social funding that funds some women’s services, these are mostly services that support women into employment. One of our partners who receives this funding said it’s beneficial because it’s very holistic – it takes into account that a lot of the women they support into work are women who may never have been in paid work, a lot of them don’t have English as a first language, and they need a lot of help before they’re ready to engage in the labour market.
The government has promised it will continue to provide a fund to support these services, but we don’t know what that fund is going to be yet.
Existing funding from the UK government tends to be very heavily skewed to payment by results. It’s fine if you are trying to support people who would probably get a job by themselves anyway, but once you’re looking at people who are in complex situations, who actually need the additional support, UK government projects don’t necessarily help that much.”
The future cost
“The economy is already smaller than it would otherwise have been. If you look at the Office for Budget Responsibility’s figures which come out with the Budget and the spring financial statement every year, they project what size they think the economy and the levels of growth will be. They’ve said that Brexit uncertainty has meant the economy is smaller than it would otherwise have been had we not voted to leave in the referendum.
What you see is companies postponing investment, and being wary of borrowing money to invest in new equipment and training staff because they don’t know what’s going to happen in the future, and they’re not sure if they’re going to make a return on that investment.
It is not inevitable that if the economy goes into recession the government makes further cuts. It could choose to spend more money, and indeed we’ve argued that it should. The government should protect the economy against the impact caused by Brexit by investing, particularly in social infrastructure, into services like healthcare and education. But if the government responds in the way it has responded since the 2008 financial crisis by cutting public spending, then we know that will hit women harder, because we’ve seen what’s happened since 2010.”
Read the Women’s Budget Group report here.