Independent UK: Fears that Chancellor's cuts could foster massive rise in unemployment

[marmar]

Fears that Chancellor's cuts could foster massive rise in unemployment
George Osborne says that without the cuts that loom in tomorrow's Budget, Britain will be on 'the road to ruin'. But does the Chancellor risk creating unemployment on a scale not seen since the 1970s?

By Sean O'Grady, Economics Editor
Monday, 21 June 2010


The toughest Budget since the Second World War will be delivered by the Chancellor, George Osborne, tomorrow as he prepares to slash public spending in some departments by up to 30 per cent, strip away middle-class perks and deliver one of the biggest tax hikes in history.

Fresh economic forecasts from the new independent Office for Budget Responsibility, which will take into account Mr Osborne's squeeze on the economy, are likely to signal lower growth and a substantial jump in unemployment over the next few years – closer to 10 per cent or 3 million jobless than the current 2.5 million – figures that recall the dark days of the 1970s.

Mr Osborne is expected to outline a further £27bn in cuts, compared with the plans laid down by the last Chancellor, Alistair Darling, in March, as well as around £15bn in tax rises, bringing the total squeeze on the economy to £75bn a year by 2015. This represents a real-terms cut of a fifth in public spending, and, if job losses were proportionate to those cuts, then there would be one million fewer public sector jobs in five years' time. Some say that Mr Osborne may go further, perhaps to £85bn. The National Institute of Economic and Social Research has said that the £6bn in cuts this year alone will see 30,000 to 60,000 posts disappear.

In what the Prime Minister, David Cameron, described over the weekend as a "tough but fair" approach, tax hikes will be balanced by some concessions for the less well-off. Though the package will be grim, the alternative would be worse, the Chancellor implied yesterday. Without tough measures, the UK would be "on the road to ruin", he said. "We sit here as the country in Europe with the largest budget deficit of any major economy, at a time when markets are looking around the world at countries that can't control their debts, and so we've got to deal with that," the Chancellor said. ...........(more)

The complete piece is at: http://www.independent.co.uk/news/uk/politics/fears-that-chancellors-cuts-could-foster-massive-rise-in-unemployment-2006087.html

[Ken Burch]

1. My guess is, they'll try to put the worst of the cuts through

before the Labour leadership race is decided.

At this point, there's no effective opposition to what the Tories(and their "Liberal Democrat" enablers)are doing.

[MisterP]

2. of course, Blairite "Labour" loves their Thatcherism just as much... nt

[Ken Burch]

3. Granted...but they'd have to at least PRETEND to be outraged

If they had a leader at this point.

Even though she won't win, I hope Diane Abbott gets the best possible showing. There needs to be a demonstration within Labour that it is beginning to change if that party is to survive at all.

Big Brother Miliband or Balls will just be "meet the new boss, same as the old boss...or possibly as worse boss"(to extend the Who lyric slightly, and yes it's ironic that you'd hear famous Tory Roger Daltrey singing that in your mind's ear).