TUC Warns Against Spending Cuts

(Press Association) – CUTTING PUBLIC SECTOR SPENDING in health and education would cost tens of thousands of jobs, including a ‘significant’ number in private companies, the TUC has warned.

The union umbrella group said 200,000 public sector jobs would be lost if spending was slashed by 10% and warned the private sector would also be badly affected.

Public spending had increased by £174 billion in the decade to 2007/8, leading to an extra 570,000 jobs, heavily concentrated in education and health, said the report.

Cutting spending on health and education was bound to have an impact on private sector contractors selling goods and services to the public sector, it was argued.

TUC general secretary, Brendan Barber, said: ‘A mania has gripped otherwise sensible commentators who are calling for deep cuts in public spending to reduce the budget deficit.

‘They talk as if these cuts would have no effect on the private sector or the wider economy, and that health, education, and front-line services would hardly notice; but this is a delusion.

‘Cuts in public spending would inevitably hit the private sector. More money is spent on buying goods and services from private companies than on the public sector pay bill. As health and education are such significant parts of the public sector, and have been the overwhelming beneficiaries of higher spending in the last decade, no deep cuts package could spare them.’

Mr Barber said cuts in public spending now would ‘choke off’ any recovery from the recession, adding: ‘Not only would a 10% cut in public spending directly cause public servants to join the dole queue; but it would also hit the private sector hard as both the state, and workers who have got the sack, stop buying its goods and services.

‘The net result of this would be to plunge the economy into a further downturn that would make the deficit even worse as the tax take further falls and jobless benefit bills increase.

‘When companies and individuals stop spending, the only way to avoid a slump is for the state to fill the gap. The best way to close the deficit is to go for growth and increase the tax take from the super-rich who have done so well from the boom years.’

… (17/07/2009) – IMF Warns Britain’s Soaring Debt Is ‘Testing The Limit’

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