Welfare Cuts 'Will Widen North-South Divide'

People living in northern England will be hardest hit by the Government's welfare reforms, according to new research.

Adults in Blackpool will lose an average of £910 a year each - more than anywhere else in Britain, the study by Sheffield Hallam University suggests.

It claims changes to housing benefit, disability living allowance, child benefit, tax credits and council tax benefit will take nearly £19bn out of the economy every year

Former industrial areas including Middlesbrough, Liverpool and Glasgow will also be disproportionately affected.

However, wealthier areas such as Cambridge, parts of Surrey and the Cotswolds are expected to see the smallest financial losses.

Westminster, with its high cost of living, will be the worst-affected London borough, with the average adult losing £820 in annual benefits.

Professor Steve Fothergill, of Sheffield Hallam's Centre for Regional Economic and Social Research, which led the study, 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.

"Our figures also show the coalition Government is presiding over national welfare reforms that will impact principally on individuals and communities outside its own political heartlands."

Professor Fothergill found that, on the whole, the more deprived the local authority, the greater the financial impact.

Collectively, the North West, North East, Yorkshire and Humberside stand to lose £5.2bn a year in benefit income.

David Cameron, speaking on Thursday to Sky political editor Adam Boulton, insisted he did want to close the gap between rich and poor and create a "fairer country".

He rejected the idea that people who depend on benefits because they do not have a job would be worse off in his Britain as he defended his plans.

"Labour tested to destruction the idea that simply through larger and larger increases in the welfare bill you can heal the north-south divide. You can't," he said.

"What Labour did is create a more welfare dependent country ... We can't afford the state we have today, we need a smaller state and bigger private sector."

The Department of Work and Pensions said around nine out of every 10 working households would be better off by an average of almost £300-a-year because of the changes.

"Our welfare reforms, including reassessing people on incapacity benefit, will help people back into work, which will benefit the economy more than simply abandoning them to claim benefits year after year," a spokesman said.

"These changes are essential to keep the benefits bill sustainable, so that we can continue to support people when they need it most across the UK."

Changes to Housing Benefit, Council Tax Benefit and Disability Living Allowance have already been made.

A benefit cap of £500 per week for a family and £350 for a single person will be introduced on April 15, while Universal Credit, which replaces a number of means-tested benefits, will be rolled out from October.