Written evidence submitted by Northern Ireland Human Rights Commission

Summary of Recommendations

The Northern Ireland Human Rights Commission (NIHRC):

 

2.12              advises that restoring the economy and raising revenue given the increase in public expenditure due to COVID-19 should be done in a way that does not penalise households on low income and persons who are already disadvantaged, including those with protected characteristics.

 

2.13              recommends that the UK commits to conducting a comprehensive impact assessment of tax and social security reforms across the UK at regular intervals. The assessment should then inform future reforms.

 

3.7              recommends that the UK Government commits to ensuring effective participation when designing, developing, implementing monitoring and evaluating tax reform. This should include a commitment to make reasonable accommodation to ensure such participation is accessible for all.

 


1.0              Introduction

1.1              The Northern Ireland Human Rights Commission (NIHRC), pursuant to section 69(1) of the Northern Ireland Act 1998, reviews the adequacy and effectiveness of law and practice relating to the protection of human rights. In accordance with this function, the following evidence is submitted to the Treasury Committee, as part of its inquiry into the tax system after coronavirus.

 

1.2              The NIHRC welcomes the opportunity to provide evidence to this inquiry. The inquiry is broad in scope, however, the NIHRC limits its submission to highlighting the need for a human rights approach to assessing the impact of fiscal policy.

2.0              Cumulative Impact Assessment

2.1              The UK is bound by international law to promote, protect, and fulfil human rights and must mobilise the necessary resources to do so.[1] Government expenditure funded by taxation is essential in guaranteeing access to basic services for all, including healthcare, education and social security.[2] Accordingly, taxation plays an important redistributive role and can contribute to the equitable sharing of wealth within society and funding the delivery of public services. The NIHRC is particularly interested in the role taxation may have in alleviating poverty.

 

2.2              As elaborated in the UN’s Guiding Principles on Extreme Poverty:

States should make certain that adequate resources are raised and used to ensure the realisation of the human rights of persons living in poverty. Fiscal policies, including in relation to revenue collection, budget allocations and expenditure, must comply with human rights standards and principles, in particular equality and non-discrimination.[3]

2.3              The NIHRC has long been concerned that tax reforms introduced in 2010 in the context of austerity continue to have a disproportionate, adverse impact on the enjoyment of economic, social and cultural rights by disadvantaged and marginalised groups. However, while all new policies are subject to an equality impact assessment, this process only examines individual policies and does not take into consideration the combined impacts of various reforms. Therefore, it was difficult to assess whether, overall, UK fiscal policy was contributing to inequality. By way of illustration, recognising the need to assess the government’s welfare reform policy in its entirety, the Social Security Advisory Committee recommended that the government conduct a cumulative impact assessment in 2014.[4]

 

2.4              The call for a cumulative impact assessment has since been adopted by a number of UN treaty monitoring bodies: the UN Committee on Economic, Social and Cultural Rights in 2016,[5] the UN Committee on the Rights of the Child in 2016[6], the UN Committee on the Rights of Persons with Disabilities in 2017,[7] and the UN Committee on the Elimination of Discrimination against Women in 2019.[8] The UN Committees highlight that such an assessment would clearly identify how specific groups for example, children, persons with disabilities or women have been impacted by government policy with the view to formulate targeted measures.

 

2.5              The NIHRC’s own research has provided an indication of the groups that were already experiencing financial disadvantage pre-COVID-19. This includes households with children and households where either adults or children have disabilities.[9] There will be a need to restore the economy and raise revenue post COVID-19 given the increase in public expenditure and this should be done in a way that does not penalise or further negatively affect the already disadvantaged. Any policies to recover the substantial unplanned expenditure should ensure that those best able to pay bear the greatest burden. As the former UN Special Rapporteur on Extreme Poverty Phillip Alston states “the regressive or progressive nature of a State’s tax structure shapes the allocation of income and assets across the population, and thereby affects various types of inequality”.[10] Further, the former High Commissioner for Human Rights, Zeid Ra’ad Al Hussein, has stated that “an economic crisis should not lead to cuts in budget allocations or expenditure that threaten realisation of these rights”.[11] A cumulative impact assessment will assist with ensuring the correct balance is struck.

 

2.6              To date, the UK Government has declined to conduct such an assessment of social security reform, citing that modelling difficulties would prevent it from producing an assessment sufficiently robust to be published. In response to a Parliamentary Question in 2014, the Minister of State for Disabled People, Department for Work and Pensions articulated this position stating:

distributional analysis is provided for the whole population on the basis of household income and household expenditure. However, this is not disaggregated to the level of household characteristics such as disability status or lower level geographies. No organisation is able to do this robustly. The Government currently has no plans to undertake a review or change the decision on cumulative impact assessments.[12]

2.7              Accordingly, the Equality and Human Right Commission conducted its own assessment for England and Wales[13] and Scotland.[14] In 2019, the NIHRC published a cumulative impact assessment for Northern Ireland.[15] A copy of the NIHRC’s report is available at: https://www.nihrc.org/publication/detail/cumulative-impact-assessment-of-tax-and-social-security-reforms-in-northern

 

2.8              The assessment uses the tax-transfer model, which uses data from the Family Resources Survey and the Living Costs and Food Survey.[16] The model shows the distributional effects of tax and welfare changes by household income decile and by protected characteristics including ethnicity, disability and demographic type. This methodology models reforms to the tax and social security systems, including income tax, indirect taxes (VAT and excise duties), tax credits as well as means-tested and non means tested social security benefits. In addition, it also models the impact of above-inflation increases in the National Living Wage and National Minimum Wage.

 

2.9              Among the report’s key findings were:

a)    Overall, around 43 per cent of households in Northern Ireland lose out from changes to direct taxes and social security since 2010. Almost 77 per cent of households lose out from changes to indirect taxes.

 

b)   Breaking winners and losers down by household characteristics, the largest proportion of losers from the direct tax and social security reforms are found in the bottom three deciles of the income distribution, lone parent households, single pensioners, households with a high disability “score”, households with three or more children in them, and households with no-one in paid work.

 

c)    The household groups with the lowest proportions of losers in them are households in deciles 2 and 3, childless couples, households with no disabled people in them and households with two or more adults in paid work.[17]

2.10              The methodology makes it possible to identify the households that have experienced the most adverse impact. This creates an opportunity for policy makers to develop poverty-reducing measures targeted at those particular households. For example, in Northern Ireland, the cumulative impact assessment provides an evidence base on which to devise further mitigations as part of the review of the mitigation package agreed in the Fresh Start Agreement.

 

2.11              The work conducted by the NIHRC and the Equality and Human Rights Commission demonstrates that a cumulative impact assessment is feasible.

 

2.12              The NIHRC advises that restoring the economy and raising revenue given the increase in public expenditure due to COVID-19 should be done in a way that does not penalise households on low income and persons who are already disadvantaged, including those with protected characteristics.

 

2.13              The NIHRC recommends that the UK commits to conducting a comprehensive impact assessment of tax and social security reforms across the UK at regular intervals. The assessment should then inform future reforms.

3.0              Effective Participation

3.1              The Committee’s Inquiry poses the question of how the UK Government should consult with stakeholders on the issue of tax reform. The NIHRC advises the Committee about the importance of effective participation. Effective participation is an essential component of a human rights based approach and aims to ensure that persons directly impacted by government policy have an opportunity to be involved in shaping such policy. This applies to every aspect - design, development, implementation, monitoring and evaluation.

 

3.2              The right to participate in public affairs is specifically protected by Article 25 of the UN International Covenant on Civil and Political Rights. In addition, Target 16.7 of the UN 2030 Agenda for Sustainable Development provides for responsive, inclusive, participatory and representative decision making at all levels. Best practice related to effective participation can be drawn from the UN Convention on the Rights of Persons with Disabilities (UN CRPD).

 

3.3              The UN CRPD has been guided by the motto “nothing about us, without us.” This, according to the UN Committee on the Rights of Persons with Disabilities (UN CRPD Committee), “resonates with the philosophy and history of the disability rights movement, which relies on the principle of meaningful participation”.[18] This approach should be not be limited to disability issues alone, but should be applied more generally to all human rights issues.

 

3.4              Ensuring effective participation requires consideration of an individual’s specific needs.[19] This also requires State parties to make reasonable accommodation for persons with disabilities, in line with UN CRPD, Article 5(3), and UN CRPD Committee’s General Comment No 2.[20]

 

3.5              The NIHRC’s cumulative impact assessment demonstrates the extent to which tax and social security reforms impact on persons who are already experiencing disadvantage. It is essential that such persons, and their representative organisations, have an opportunity to feed in. While effective participation should be incorporated in all government policy, it is particularly important in the context of tax reform given the prevalence of powerful corporate and business lobbyists. The UN Guidelines for States on the effective implementation of the right to participate in public affairs may be an additional useful resource for the Committee in this regard.[21]

 

3.6    Achieving effective participation in practice can be done in a number of ways, for example through Citizens Assemblies which could either look at tax reform in broad terms or take a more focussed approach, such as the use of taxation options to fund social care reform as part of the UK Government’s commitment to tackling effectively this specific issue.

 

3.7              The NIHRC recommends that the UK Government commits to ensuring effective participation when designing, developing, implementing monitoring and evaluating tax reform. This should include a commitment to make reasonable accommodation to ensure such participation is accessible for all.

 

August 2020

 

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[1] ‘UN Committee on Economic, Social and Cultural Rights General Comment No 3: The Nature of States Parties’ Obligations’, 1990.

[2] UN Office of the High Commissioner, ‘Realising Human Rights through Budgets’ (OHCHR, 2017).

[3] A/HRC/21/39, ‘UN Special Rapporteur on Extreme Poverty: Guiding Principles on Extreme Poverty and Human Rights’, 18 July 2012, at para 53.

[4] Social Security Advisory Committee, ‘Occasional Paper No 12: The Cumulative Impact of Welfare Reform’ (SSAC, 2014).

[5] E/C.12/GBR/CO/6, ‘UN ICESCR Committee Concluding Observations on the Sixth Periodic Report of the UK of Great Britain and NI’, 14 July 2016, at para 19.

[6] CRC/C/GBR/CO/5, ‘UN CRC Committee Concluding Observations on the Fifth Periodic Report of the UK of Great Britain and NI’, 3 June 2016, at para 12.

[7] CRPD/C/GBR/CO/1, ‘UN CRPD Committee Concluding Observations on the Initial Report of the United Kingdom of Great Britain and Northern Ireland’, 3 October 2017, at para 59(b).

[8] CEDAW/C/GBR/CO/8. ‘UN CEDAW Committee Concluding Observations on the Eighth Periodic Report of the United Kingdom of Great Britain and Northern Ireland’, 8 March 2019, at para 17.

[9] Howard Reed and Jonathan Portes, ‘The Cumulative Impact Assessment of Tax and Social Security Reforms in Northern Ireland’ (NIHRC, 2019), at para 7.3.

[10] Philip Alston, ‘Tax Policy is Human Rights Policy: The Irish Debate’, Keynote Address at Christian Aid Conference on The Human Rights Impact of Tax and Fiscal Policy in Dublin, 12 February 2015.

[11] Office of the UN High Commissioner for Human Rights, ‘Realising Human Rights through Budgets’ (OHCHR, 2017), at 105.

[12] Hansard, ‘Written Answers: Social Security Benefits: Disability Column 299W-300W’, 9 April 2014.

[13] Equality and Human Rights Commission, ‘The Cumulative Impact of Tax and Welfare Reforms’ (EHRC, 2018).

[14] Equality and Human Rights Commission, ‘The Cumulative Impact of Tax, Social Security and Public Spending Decisions in Scotland’ (EHRC, 2019).

[15] Howard Reed and Jonathan Portes, ‘The Cumulative Impact Assessment of Tax and Social Security Reforms in Northern Ireland’ (NIHRC, 2019).

[16] The tax-transfer model is a microsimulation model developed by the Institute for Public Policy Research, Landman Economics and the Resolution Foundation.

[17] Howard Reed and Jonathan Portes, ‘The Cumulative Impact Assessment of Tax and Social Security Reforms in Northern Ireland’ (NIHRC, 2019), at para 7.3.

[18] CRPD/C/GC/7, ‘UN CRPD Committee General Comment No 7: Participation of Persons with Disabilities, Including Children with Disabilities, Through their Representative Organisations, in the Implementation and Monitoring of the Convention’, 9 November 2018, at para 4.

[19] Article 9, UN Convention on the Rights of Persons with Disabilities 2006.

[20] CRPD/C/GC/2, ‘UN Committee on the Rights of Persons with Disabilities General Comment No 2: Accessibility’, 22 May 2014, at para 26.

[21] Office of the UN High Commissioner for Human Rights, ‘Guidelines for States on the Effective Implementation of the Right to Participate in Public Affairs’ (OHCHR, undated).