Cuts to tax credits in the 8th July budget are likely to badly and disproportionately affect Britain's ethnic minority communities, a Financial Times analysis of official data has revealed.
Under the current system lower income families receive extra payments for each child living at home. Chancellor George Osborne has indicated that he is planning substantial cuts to tax credits and housing benefits to save £12bn from welfare budget.
Recent government data has revealed, tax credits- a form of welfare payments to low earners provide 10% of Pakistani and Bangladeshi households. This is essentially because these communities tend to have bigger families and lower incomes than average. The study also revealed, that Indians receive the lowest amount of income through tax credits, much less than average 2% that white Britons claim. Blacks receive about 6% of payments.
Omar Khan, director of Runnymade, a race equality think-tank and a member of the ethnic minority advisory group to the Department for Work and Pensions, said the cuts to tax benefits will inevitably affect the racial inequalities and probably increase child poverty.
City based analysis has shown that places with higher non white population, tend to receive higher benefits. A chart below shows the percentage in details:
City %Non-white population tax credit as % of household Average value (both in and out of work)
Bradford East 46.9 46.3 £7659
Bradford West 62.9 63.5 £7872
Blackburn 40.7 43.5 £7320
Birmingham Hodge Hill 64.3 54.8 £8387
Birmingham Hall Green 64.5 43.9 £8053
Tottenham 49.9 42.7 £7104
West Ham 65.5 47.9 £6884
East Ham 76.9 47.5 £7342
Peterborough 22.6 43.0 £6683
Leicester East 68.6 44.3 £6727
According to 2011 census, while Blackburn has about 20,000 Indians, 18,000 are of Pakistani origin. Hindus constitute 0.4% of the population, but 27% are Muslims. In Leicester 28.3% are of Indian origin, while only 2.4% of Pakistani origin. Birminghm has 3% Bangladeshis, 6% Indians and 13.5% Pakistanis. London borough of Newham (West Ham and East Ham) have 13.8% Indians, 9.8% Pakistanis and 12.1% Bangladeshis.
