Official analysis of Budget impact on jobs revealed

Press Association

Wednesday, 30 June 2010

Fewer people will be in work in five years' time because of the coalition Government's austerity plans than under existing Labour proposals, official figures showed today.

Job losses in the public sector are expected by the Office of Budget Responsibility (OBR) to total more than 600,000 by 2016 as massive spending cuts are imposed in a bid to cut the UK's record deficit.

And although extra private sector jobs will see overall employment rise by just over a million by 2015 - that is slightly lower than forecast by the independent watchdog before last week's Budget.

The OBR rushed out its calculations a day early after leaked figures appeared to show the Treasury expected unemployment to rise by 1.3 million because of the austerity measures.

Clashes over the impact on jobs dominated exchanges at Commons question time, where acting Labour leader Harriet Harman warned of "abject misery" in the jobs market.

Prime Minister David Cameron repeatedly declined to comment on the leaked figures - which The Guardian newspaper said were on a slide from a Treasury presentation on the Budget.

The OBR figures were the official analysis of the effects of the Budget, he said, and showed unemployment falling every year.

And, in what he said was a Labour "own goal", he pointed out that the OBR expected fewer public sector workers to face the axe over the next two years because of a pay freeze.

The rate will accelerate after that however - with 30,000 more expected to suffer the effects of cutbacks by the time of the scheduled next general election in 2015 than under Labour's plans.

According to the OBR, overall employment will be 29.97 million by 2014/15 - compared with the 30.02 million it forecast before Chancellor George Osborne unveiled his tough measures.

That equates to an extra 1.57 million more private sector jobs.

The Government has said it is vital to "rebalance" the economy away from an unsustainable reliance on the public sector if the economy is to recover from the recession.