SDLP MLA Mark H Durkan has raised concerns the knock-on effect the removal of the Universal Credit uplift will have on the local economy.
The measure, which was introduced by the Tory Government to assist benefit claimants struggling throughout the pandemic is due to come to an end in early October and will see tens of millions of pounds potentially stripped from the local economy.
Speaking following a meeting with the Federation of Small Businesses NI (FSB), the Foyle MLA said: “It’s clear that the focus for the Federation of Small Businesses now is on the recovery period and to ensure the tools are there to assist business owners to rebuild following the pandemic.
“This week I met with representatives from FSB and we had a frank discussion on the outlook for the local economy and small businesses.
“However, that conversation cannot be had without considering the ability of the public to contribute to that recovery.
“I appreciate the High Street Voucher scheme will play its part in that plan, provided that all those individuals entitled to it can access it.
“Yet the reality remains that the far reaching implications of the Universal Credit cut will not just impact on low-income households but essentially the removal of £55.5 million this financial year, during such a critical period of post-pandemic recovery will be devastating for local businesses.
“This removal will be most profound in areas of high deprivation such as Derry; in Foyle alone this cut runs the risk of taking almost £7.5 million from the local economy.
“The Foyle Foodbank has witnessed a 75% increase in usage over the past year and that is with the uplift.
“Now people have to battle the rising costs of living: a gas hike which in real terms means a rise of almost £200 for the average annual household bill.
“And with the implications of the Protocol, shopping bills are expected to rise by more than £160 per year.
“There are clearly a myriad of issues here, yet there has been little to no action taken to prevent plunging people further into poverty.
“Proactive measures must be taken now by Minister Hargey and Minister Murphy, to secure the continuation of the uplift in the absence of action by the British government.
“This would not only add a layer of protection for struggling families but will give local businesses the best chance at recovery.
“To remove the uplift is to walk blindly into catastrophe.
“Now is the time to heed the warning call,” added Mr Durkan.
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