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Northern Ireland families to lose £1,500 a year in tax credit cuts: report

By Noel McAdam

Published 17/11/2015

George Osborne
George Osborne

Families in receipt of tax credits in Northern Ireland are set to lose an average of almost £1,500 a year, new research has revealed.

Under the current plans of Chancellor George Osborne, the analysis confirms the province will be the hardest hit region in the United Kingdom.

The report from the Trade Unions Congress (TUC) - to be released in full tomorrow -shows that more than nine in 10 (91%) working tax credit households in the UK will be worse off as a result of the Government cuts and then sets out the average loss in each part of the country.

It concludes: "In Northern Ireland, where average income per head is the lowest in the UK, the average loss to working tax credit claimants will be £1,480 - the highest of any UK nation and region." The loss to families here is around £500 worse than official estimates calculated by the Department of Social Development.

It warned more than 120,000 households will have their tax credit payments reduced as a result of the July Budget and suggested the average loss per household will be £918 per year.

TUC General Secretary Frances O'Grady said: "This research makes clear that as well as making families suffer, the tax credit cuts will make regional inequalities worse. The households who will lose the most are those already in low-income areas.

"Instead of cuts that target the UK's lowest-paid communities, the Government should channel more support towards them.

"The Prime Minister and the Chancellor seem to be the last people in Britain who still think the tax credit cuts are a good idea.

"They don't seem to understand that people in work deserve a decent income. These cuts should be ditched altogether."

In contrast to the £1,480 average hit to family incomes here, the average loss for a losing household in London will be £1,110 - despite the fact that the capital has the highest average income per head in the UK.

Working tax credit households in every UK region and nation will suffer larger average losses than London despite having lower incomes.

In the North East, for example, where average income per head is more than £7,500 lower than London, households will be £1,410 worse off from the Chancellor's tax credit cuts.

And in Yorkshire and the Humber, where average income per head is more than £7,000 lower than the capital, households will lose £1,440.

In total the TUC estimates that over £4.5bn will be lost from working recipients of tax credits across the UK as a result of the cuts.

The TUC said the analysis demonstrates that the tax credit cuts will worsen regional income inequalities.

The government should be supporting families on lower incomes rather than making them even worse off, added the TUC.

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