Let's not play the coalition's game here by narrowing the whole issue of austerity vs. investment to a simplistic assessment of private sector job gains set against public sector losses. More than anything it's the growth statistics that give us the bigger and more accurate picture. Not only are many of these "gains" part-time, but pay in general may be lower and consequently general purchasing power will be lower (though equally we shouldn't exaggerate the perks of these public-sector jobs either). Yes, you might expect this private-sector labour to be in a more productive sector, but none of this has been reflected in the recent growth statistics.

Yet, even if these reforms do promote overall growth the question is what kind of society we'll have after this shift in the structure of the economy is complete. More of our workforce will be shifted to a sector with lower pay, and lower long-term job (and retirement) security. Labour's decade of excessive personal debt levels - where households lived beyond their means at 120% of their income due to disparities between pay and prices - may end up looking comparatively meagre. The OBR's early forecasts of coalition growth were in fact predicated on increasing personal debt levels, and this explains Cameron's reluctance in the Party Conference to engage on any moral crusade against personal debts.

The price of lower public-sector debt may be greater household debts, and consequently less stability and more hardship for workers - and this, as the past 20 years have shown, is foundation on which to build either a stable economy or a stable society. This I fear is the consequence if you restructure labour into a less secure and more difficult sector, and fail to think fundamentally about changing the whole system of wages & pay - which is what Ed Miliband at least, to his credit, is now looking into.

On what basis do Cameron and Clegg and Ed Milliband conclude that good health, good education, fire prevention, road provision, defence forces, courts of justice and provision of good governance are not a necessary basis for any economic system other than slavery.
This is Cameron's Poll Tax moment.

@Bee Clarke

The world economy is weak, even China is slowing down. The UK is doing well given to enormous deficit.

The GDP figures for growth include the impact of government borrowing - as borrowing is slowed the economy will shrink. Its a synical Labour myth that we can borrow our way to economic success - Labour tried that one and look what happended.

Or perhaps you deny Labour borrowed £350Bn before 2008 and the banking crises? Our kids wont deny it as they are the ones saddled with the debts.

@ indu pendent

Except that the private sector isn't creating wealth. The latest evidence shows the economy shrunk by 0.2%. The poor economic performance of the Tories since they came to power proves the 'crowding out' theory of the public sector is a right-wing myth.

@george

The good news is we are half way. There are another 300,000 public sector positions to phase out through natural wastage and cutting recruitment into the public sector. Which by the way in case you forget Labour supports. Or rather the Labour leader Miliband and (some would say his boss) Ed Balls have said they support even if the rest of the party does not.

So George, your point is? Perhaps the Coalition are not going as fast as Miliand and Balls have signed up to?

"Since June 2010, 350,000 of the former have been lost"

I'm sure you will give the Coalition full praise for slowly shrinking the public sector without resorting to heavy redunancies.

@george
Pls could you do some maths for me.

Assuming 270,000 jobs @ £26k have been lost from the public sector (management grades were cut first so the £26k is likely to be higher). The overhead rate if public sector workers is typically 142% including pensions so the saving to the state is £62.9k per person net of tax on the £26k.

These people have been replaced by 226,000 private sector jobs on similar basic salaries generating wealth.

Could you tell me what the net benefit to the country is.

So you dont support it then?

The cuts to the public sector are not nearly deep enough if you ask me, strip the state right back to the bare minimum !!!