Muslims among worst affected by budget

28th Aug 2015

Hamed Chapman

Black and minority ethnic Britons are once again likely to lose out the most from the latest Conservative budget, which risks widening the country’s racial divide.

According to a report by the Runnymede Trust, four million black and minority ethnic people could be left with less income, with one of the worst affected groups being British Muslims.

Omar Khan, the Director of the racial equality think tank, said minority ethnic Britons were around twice as likely to lose out as white Britons from Chancellor George Osborne’s plans.

The study built in the fact that the national minimum wage will rise to £9 a hour in 2020 but changes to tax credits and other welfare payments will hit minority ethnic Britons harder than their white compatriots.

Khan said: “Black and minority ethnic people are more likely to be disadvantaged by the budget. While ethnic minorities form around 11% of households and 14% of the UK population, we expect them to be over 15% of households and around 25% of individuals worst affected by the budget – because of their younger age, higher child poverty, lower wages, fewer pensioners and greater part-time working.”

Among ethnic minorities, more than 1.25 million households and more than 4 million people could be worse off, the study calculates, though the figure could be several hundred thousand higher and Runnymede adds that its calculations may underestimate the impact of the first separate Conservative budget in 18 years.

Runnymede wants the Government to carry out a formal audit of the effect the budget will have on racial equality as the Treasury did not respond when asked if it had carried out an equalities assessment of the 2015 budget.

The Runnymede study finds that minority ethnic people will be hit by cuts to tax credits, new limits on child benefit and the lowering of the benefits cap. People of Bangladeshi and Pakistani heritage in Britain are significantly poorer than other groups and five times more likely to have their income topped up by tax credits than white people.

Bangladeshi men in particular are seven times more likely than white men to be working part time. More than one in three Bangladeshi men are in part-time work, compared with 9% for Indian men, 10% for black Caribbean men, 12% for black African and Chinese men, and 18% for Pakistani men.

According to the Guardian a Treasury spokesperson said the budget sets out a “new contract with Britain, moving from a low wage, high tax, high welfare economy to a lower welfare, lower tax and higher wage economy.”

“These changes mean that work will always pay more than a life on benefits, and the vast majority of working households will be better off once the changes have come into force in 2017. And all families are better off when you live in a country with the economic security that comes from living within its means.”

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