REPORT: Welfare reforms will strip £71m a year from St Helens economy

ST HELENS will be among the areas worst hit by the welfare reforms, with changes to benefits stripping the average working age adult of £630 per year, researchers say.

The borough is listed at 29th in a table showing towns and cities that will be most blighted by the reforms in 2014/15, following a study by academics at Sheffield Hallam University.

It is estimated that the impact will cost the borough’s economy £71million a year.

Knowsley, meanwhile, which includes areas such as Whiston and Prescot, is listed at third, losing £75million a year, according to researchers.

A study suggests older industrial owns in the north, seaside towns and some London boroughs will feel the deepest impact of the controversial policies, which included the so-called bedroom tax and changes to council tax benefit.

St Helens is 20th on the list of areas worst affected by changes to housing benefit and Knowsley is second.

In terms of incapacity benefit losses, St Helens will be the 19th most severely affected.

The research shows that when the welfare reforms have come into full effect they will take almost £19bn a year out of the economy.

But the impact of the reforms varies a lot from place to place. The worst affected face financial losses that are twice the national average and four times as much as the least affected places.

Much of the south and east of England outside London escapes comparatively lightly.

However, the three regions of northern England alone can expect to lose around £5.2bn a year in benefit income.

According to the university: “As a general rule, the more deprived the local authority, the greater the financial hit.”

Professor Steve Fothergill from Sheffield Hallam's Centre for Regional Economic and Social Research, who led the study alongside colleague Professor Tina Beatty, said: “A key effect of the welfare reforms will be to widen the gaps in prosperity between the best and worst local economies across Britain.”

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9:26am Fri 19 Apr 13

Sankey says...

Unemployment is higher in the north so you woud expect the north to be disproportionately be hit harder than the south. But the article says £19b is removed from the economy. Is that technically correct ? Benefits are paid from taxes on output so technically that s £19b into the economy not out.

In the short term of course that is less cash in the local economy in the medium term it should encourage growth by freeing up the productive economy.

Incidental to pay for welfare we are borrowing from countries like china to pay for welfare in the uk even though china has no welfare to speak of. In theory we are taking from the poor in china to give to the poor in Britain so that the future poor in Britain can pay back to the poor in china.

We simply cannot carry on like that forever whatever your opinion its simply unsustainable.
Unemployment is higher in the north so you woud expect the north to be disproportionately be hit harder than the south. But the article says £19b is removed from the economy. Is that technically correct ? Benefits are paid from taxes on output so technically that s £19b into the economy not out. In the short term of course that is less cash in the local economy in the medium term it should encourage growth by freeing up the productive economy. Incidental to pay for welfare we are borrowing from countries like china to pay for welfare in the uk even though china has no welfare to speak of. In theory we are taking from the poor in china to give to the poor in Britain so that the future poor in Britain can pay back to the poor in china. We simply cannot carry on like that forever whatever your opinion its simply unsustainable. Sankey

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