View all newsletters
Sign up to our newsletters

Support 110 years of independent journalism.

  1. Business
  2. Economics
30 June 2010updated 12 Oct 2023 9:58am

The mass unemployment Budget

The Guardian’s Treasury scoop demands a better response from the right.

By Mehdi Hasan

Regular readers of the New Statesman will know that this magazine and its writers have long opposed the right’s neo-Hooverite “austerity” measures and have worried about the prospect of a return to mass unemployment. In one of his first columns for the NS, back in September 2009, Professor David Blanchflower, a former member of the Bank of England’s Monetary Policy Committee and one of this country’s most respected labour-market economists, wrote:

If large numbers of public-sector workers, perhaps as many as a million, are made redundant and there are substantial cuts in public spending in 2010, as proposed by some in the Conservative Party, five million unemployed or more is not inconceivable.

As I’ve said before, I hope he’s wrong. He hopes he’s wrong. But this Conservative-led coalition seems intent on proving him right. Today’s Guardian front-page scoop is based on leaked Treasury data obtained by the paper’s economics editor, Larry Elliott, which suggests that George Osborne’s austerity Budget will result in the loss of up to 1.3 million jobs across the economy over the next five years.

From the Guardian report:

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team. The best way to sign up for The Green Transition is via spotlightonpolicy.substack.com
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU

Unpublished estimates of the impact of the biggest squeeze on public spending since the Second World War show that the government is expecting between 500,000 and 600,000 jobs to go in the public sector and between 600,000 and 700,000 to disappear in the private sector by 2015.

Commentators on the right, like Iain Martin and Iain Dale, have been quick to seize on the fact that, as the Guardian reports, “the Treasury is assuming that growth in the private sector will create 2.5 million jobs in the next five years to compensate for the spending squeeze”. Says Dale:

Either you believe Treasury figures or you don’t. If you believe the ones which say 1.3 million jobs will be lost, surely you then believe also the ones which say 2.5 million jobs will be created.

Not true, Iain! It is perfectly possible to accept that 25 per cent cuts in departmental spending across the board — bar Health and International Development — will inevitably lead to huge job losses (or else what do those cuts consist of? “Waste”??) without believing the speculative (and highly optimistic) figures for growth and future private-sector employment which accompany the announced cuts.

Here’s how John Philpott, chief economist at the Chartered Institute of Personnel and Development — and not a dyed-in-the-wool lefty, as far as I know! — describes Osborne’s employment forecast:

There is not a hope in hell’s chance of this happening [the creation of 2.5 million new jobs]. There would have to be extraordinarily strong private-sector employment growth in a . . . much less conducive economic environment than it was during the boom.

Oh, and on a side note, don’t forget that the Tories’ immigration cap won’t help spark a private-sector-led economic recovery, either, as business leaders, among others, have argued.

I think it is important for the left to recognise and shout about the private-sector angle to the looming crisis of unemployment. The Daily Mail and other organs of the right-wing echo chamber see all public-sector jobs as “non-jobs”, as a drag on the economy, as an unwelcome consequence of the “bloated” New Labour state, and so have little interest in the fate of soon-to-be-redundant civil servants et al.

But I can assure you that they will be screaming from the rooftops if Osborne’s masochistic cuts hit the private sector as hard as the public sector, as predicted by his own department. Losing up to 2,800 jobs a week from the private sector ain’t going to be pretty, and right-wing voices that try to distract us with mere speculation about “future” growth need to understand this.

UPDATE: Anthony Painter has more on the delusions inside Osborne’s Treasury regarding private-sector growth:

Let’s take 1999-2007 — pre-credit crunch/recession and boom time. In that time the UK private-sector economy only created 1,520,000 private-sector jobs. So what hope is there that it will create 2.5 million by 2015 in a period of slow growth, fiscal consolidation, potentially rising interest rates, and while the European economy is stagnant? Not very high would be my guess. This is a Budget that will not create jobs at the very best.

Content from our partners
The promise of prevention
How Labour hopes to make the UK a leader in green energy
Is now the time to rethink health and care for older people? With Age UK

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team. The best way to sign up for The Green Transition is via spotlightonpolicy.substack.com
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU