The jobs crisis is worsening

The pace of public sector job cuts means that unemployment is certain to rise this week.

Jobs, jobs, jobs, is the refrain that will echo through Westminster this week. The latest figures are out on Wednesday and unemployment, which currently stands at 2.57m (8.1 per cent), the highest level since 1994, is expected to rise again, while youth unemployment, which currently stands at 991,000, is expected to top a million. The danger of a lost generation is increasing every month.

To add to the gloom, the Chartered Institute of Personnel and Development (CIPD) has warned that the labour market faces a "slow, painful, contraction" with firms delaying recruitment of more staff. Its quarterly poll of 1,000 private, public and voluntary organisations showed that employers in all three sectors intend to add fewer jobs in the coming months. CIPD public policy adviser Gerwyn Davies noted: "recruitment intentions are falling, which will make further rises in unemployment therefore seem inevitable given that public sector job losses are outpacing the predictions made by the Office for Budget Responsibility ... There is no immediate sign of UK labour market conditions improving in the short or medium term." Indeed, in the last quarter, the public sector shed 111,000 jobs, while the private sector created just 41,000.

Interviewed on the Today programme this morning, Mark Hoban, the Financial Secretary to the Treasury, sounded alarmingly complacent. As is now traditional, he began by emphasising the damage the eurozone crisis has done to the British economy ("The crisis in the eurozone casts a long shadow over our economy") ignoring the fact that the growth was falling and unemployment rising long before the current imbroglio. Asked how the government would stimulate growth, he could only point to long-term measures such as "better road networks, better energy infrastructure." Ministers have not adopted one of the pro-growth policies proposed earlier this month in the New Statesman by nine of the world's leading economists.

In times of economic crisis, the state has a duty to act as the employer of last resort but the CPID predicts that 610,000 public-sector jobs will be lost by 2016, 210,000 more than forecast by the Office for Budget Responsibility. For this reason, the CIPD, hardly a hotbed of radicalism, has called for the government to halt its public sector job cuts until the private sector has recovered. But that's a message to which George Osborne, besotted with austerity, remains tone deaf.

George Eaton is political editor of the New Statesman.

Getty
Show Hide image

Lord Sainsbury pulls funding from Progress and other political causes

The longstanding Labour donor will no longer fund party political causes. 

Centrist Labour MPs face a funding gap for their ideas after the longstanding Labour donor Lord Sainsbury announced he will stop financing party political causes.

Sainsbury, who served as a New Labour minister and also donated to the Liberal Democrats, is instead concentrating on charitable causes. 

Lord Sainsbury funded the centrist organisation Progress, dubbed the “original Blairite pressure group”, which was founded in mid Nineties and provided the intellectual underpinnings of New Labour.

The former supermarket boss is understood to still fund Policy Network, an international thinktank headed by New Labour veteran Peter Mandelson.

He has also funded the Remain campaign group Britain Stronger in Europe. The latter reinvented itself as Open Britain after the Leave vote, and has campaigned for a softer Brexit. Its supporters include former Lib Dem leader Nick Clegg and Labour's Chuka Umunna, and it now relies on grassroots funding.

Sainsbury said he wished to “hand the baton on to a new generation of donors” who supported progressive politics. 

Progress director Richard Angell said: “Progress is extremely grateful to Lord Sainsbury for the funding he has provided for over two decades. We always knew it would not last forever.”

The organisation has raised a third of its funding target from other donors, but is now appealing for financial support from Labour supporters. Its aims include “stopping a hard-left take over” of the Labour party and “renewing the ideas of the centre-left”. 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

0800 7318496