10 December 2010
Northern Ireland will be hit harder by benefit cuts and tax rises than any other region in the UK except London, according to research published today.
A report by the Institute for Fiscal Studies found that between now and 2014/15 overall incomes would fall more in Northern Ireland than the UK average. This is because of an ‘unusually high proportion’ of residents receiving Disability Living Allowance, for which tighter eligibility tests are being introduced. There are also high numbers of households with children, which will lose more on average from benefit cuts than homes without children.
London fares worse in terms of income loss mainly because of tax changes that will affect those on higher incomes the most. Overall incomes in the Southwest of England will be least affected.
The analysis covers changes planned by the previous Labour government that the new government is proceeding with, as well as measures announced in the June Budget and October Spending Review.
London and the Southeast lose most from the tax rises initiated by Labour whereas Northern Ireland is mainly affected by the coalition’s changes to benefits.
James Browne, IFS senior research economist and report author, said: ‘Tax and benefit reforms to come into force over the next few years will reduce incomes in London and Northern Ireland by more than in other regions of the UK. London is particularly affected by the tax increases and cuts to Housing Benefit, while Northern Ireland contains relatively more Disability Living Allowance claimants and families with children, both of whom will see their benefits cut.’
The report, The impactof tax and benefit reforms to be introduced between 2010-11 and 2014-15 inNorthern Ireland, was commissioned by the Law Centre of Northern Ireland.
