Benefit cuts to negatively affect UK economy — Trussell

Trussell, a British non-governmental organization and charity, says Labour’s intention to cut benefits will hit the wider UK economy and public finances. 

Low employment and productivity due to financially struggling people being unable to gain and maintain a job already mean that the country’s economy is missing out on 38.2 billion pounds ($51.18 billion) a year, according to the consultancy WPI Economics. Benefit cuts can worsen the situation by depriving people of the opportunity to invest in skills development. This lowers their chances of employment and participation in the economy, slowing its overall growth.

Besides, the Treasury is missing out on 18.4 billion pounds ($24.6 billion) of tax revenues. It is also forced to spend about 5.3 billion pounds (7.11 billion dollars) to support people without a job. This in turn increases the risk of long-term unemployment.

Given these facts, Trussell urges the UK government to revise its stance on benefits in order to improve households’ financial position.