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Cuts 'will hit household incomes'

Households in some parts of the country will lose more than 5% of their income if the Government presses ahead with billions of pounds worth of spending cuts to public services, according to a new report.

The TUC said areas such as the North West, which are heavily dependent on the public sector for jobs and services, will be hardest hit by the effects of next month's comprehensive spending review.

The North West had already faced the biggest share of the £1.17 billion worth of cuts to local authority grants announced by the Government in June, losing £1 of every £6 cut across the UK, said the TUC.

In a study released ahead of a fringe meeting at the Liberal Democrat conference in Liverpool, the TUC said households across the UK each benefited from public services worth the equivalent of £21,000 a year.

Departmental spending cuts could leave households in the North West £1,284 worse off on average, the research said.

Cuts already hitting areas such as the North West included the scrapping of school building improvements, cuts in business grants and reductions in help for the unemployed, said the TUC.

General secretary Brendan Barber said: "There is real concern that the Government's programme of deep spending cuts while our economy is still fragile will spark spiralling unemployment in both the public and private sectors.

"As the cuts start to bite and people see the public services they rely on every day under threat, people will begin to ask whether there is an alternative to slash and burn economics.

"The answer is that an alternative strategy - based on growth, employment and a rebalanced economy, and paid for by a fairer tax system so that those who caused the recession start to pay their share - is the best way to achieve a sustainable economic recovery."

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