Labour MPs warn Healey £113bn lost as women excluded from economy

A group of influential female Labour MPs have warned Andy Burnham and John Healey that £113bn is being lost in economic activity every year because women are excluded from paid work on equal terms to men.

In a shot across the bows ahead of Wednesday’s Budget, a dozen MPs with the Women’s Budget Group (WBG) along with the thinktank the Good Growth Foundation (GGF) are set to publish a report on Tuesday making a series of demands for radical changes.

The document - A Political Economy for Women - comes amid concerns over a lack of women in key decision making positions on the Budget with a male chancellor replacing Rachel Reeves and another male Labour prime minister.

The collection of essays represents a push to put women’s engagement in the economy at the heart of Labour’s economic and industrial strategy.

Analysis from the Women’s Budget Group shows that the UK economy loses out on £113bn gross value added, which is the measure of goods and services produced in an area, because women don’t have equal pay and work terms with men.

The document concludes that “this is failure of design rather than an accident.”

And both the WBG and GGF warn that the problem is getting worse. When analysis was first conducted in 2023, the figure stood at £88.7bn.

The report also claims that some regional economies forgo close to a tenth of their entire annual output through the exclusion of women from the labour market, and the burden falls most heavily on places that can least afford it.

It notes that more than a quarter of working-age women are economically inactive – a rate persistently and substantially above men’s.

The essays argue that gender inequality is not a niche concern to be handled by an equalities team but should instead be central to economic strategy and policymaking.

In her essay Milton Keynes Central MP Emily Darlington, who has become an expert on technology investment and sovereignty on the Labour backbenches, argues Britain could lead the world in tech if we put women at the heart of the industry.

While sectors like Femtech are expected to double in size to £100bn by 2030, only 2p in every £1 of UK venture-capital funding goes to female-founded businesses and only around 13 per cent of senior people on UK venture-capital investment teams are women.

Her intervention comes as Mr Healey is expected to include incentives for tech investment in his Budget.

Speaking on the essays ahead of the Budget, Ms Darlington said: “If we are to see growth in every postcode we need action. The Treasury and ministers know this is an issue but they need to move the conversation away from niche equality and inclusion interventions.

“For too long, traditional economic models have treated women’s contribution to the economy as an afterthought, relying on the unpaid and underpaid labour of women to cushion systemic economic inefficiency and underinvestment.

“Instead, we need to see a structural redesign that puts women at the heart of policy so we can unleash Britain’s full potential and secure genuine economic growth.”

The collection includes a contribution from Sarah Russell MP who calls for a cap on childcare costs, arguing it would be progressive and potentially cost neutral.

Anna Dixon MP has written on how the Interim Milburn review report found “more than one in four (28 per cent) NEET young women are economically inactive due to family responsibilities, compared to around just 6 per cent of NEET young men.”

Maya Ellis MP has used her essay for a move to at least six weeks of paternity leave paid at 90 per cent of pay.