A new report claims that welfare reforms could cost the Northern Ireland economy £750 million a year.
New research has indicated that Northern Ireland will be hit the hardest by the ConDem coalition’s welfare reforms than any other part of the country.
The research, conducted by the Centre for Regional Economic and Social Research at Sheffield Hallam University for the Northern Ireland Council for Voluntary Action (NICVA), has found that the combined changes to the welfare system will take £750m a year out of the economy in Northern Ireland, equivalent, it says, to £650 a year for every working adult.
It is thought that the impact is greater in Northern Ireland than other parts of the UK as a result of the large number of people who claim Incapacity Benefit and Disability Living Allowance.
Warning of the economic impact the reforms could have on a fragile recovery, Seamus McAleavey, chief executive of NICVA said:
“The facts in this report make for stark reading for everyone in Northern Ireland – whether they receive benefits or not.
“At a time when many commentators are beginning to report that the economy is turning a corner, the impact of the removal of £750m spending power has the potential to undo any positive developments.
“We are calling on government to urgently convene a high level group of government, business, local traders and the voluntary and community sector to work together to develop a robust series of actions to protect the delicate process of economic recovery in Northern Ireland.”
Professor Steve Fothergill, co-author of the report went on to say:
“Northern Ireland has not been singled out as the target for welfare reform. But the local statistics are alarming.
“The large loss of income arising from the reforms will have knock-on consequences for local consumer spending and thus for local employment, adding a further twist to a downward spiral in low-income communities.
“A key effect of welfare reform will also be to widen the gap in prosperity between Northern Ireland and the rest of the UK.”
Earlier this week, David Cameron warned that Stormont could face a cut to its block grant from Westminster if it failed to pass the legislation currently be considered by MLAs to give effect to his government’s reforms.
Calling on the UK government to “get a grip”, Labour’s shadow Northern Ireland secretary Vernon Coaker said the findings made “very worrying reading”:
“Political parties, community groups, church leaders and charities all raised serious concerns about the government’s approach, and told Theresa Villiers and Iain Duncan Smith that Northern Ireland would be hit harder by changes to welfare. But they chose not to listen and pressed ahead despite all of the warnings.
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“The difference between Labour and the Tories is clear. Ed Miliband has said that a Labour government will scrap the bedroom tax, which adversely affects 32,000 people in Northern Ireland. David Cameron introduced the bedroom tax at the same time as cutting tax for millionaires.”