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17 June 2010

Cutting with care?

The coalition’s decision to cut support for the unemployed is deeply irresponsible.

By George Eaton

“Good luck, carry on cutting with care,” read David Laws’s note to his successor, Danny Alexander. Sound advice, but if only Laws had followed it himself. By scrapping child trust funds and cutting 10,000 university places, the coalition did anything but cut with care.

Now the new axeman, Alexander, has announced the cancellation of 12 projects worth £2bn and the suspension of 12 projects worth £8.5bn. These include the two-year Jobseeker’s Guarantee, the Young Person’s Guarantee and an £80m loan to Sheffield Forgemasters.

At first glance, the decision to reduce support to the unemployed seems deeply irresponsible. Unemployment is now certain to pass three million, with youth unemployment rising to one million.

Elsewhere, the decision to axe £80m from Sheffield Forgemasters, a company that employs 800 staff and is involved in building new nuclear power plants, is, as Ed Miliband remarked today, “self-defeating short-termism”. The coalition has damaged manufacturing and the transition to a low-carbon economy by withdrawing a loan that would, after all, have been paid back.

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Alexander’s claim that the cupboard is bare does not bear scrutiny. Only this week, new figures from the Office for Budget Responsibility showed that the Budget deficit is now £155bn. That’s £12bn less than the £167bn predicted at the last Budget and a whole £23bn less than the original forecast of £178bn.

As Fraser Nelson pointed out in a fine piece for the Telegraph, “embarrassingly, the economy is not playing along. Things just keep getting better.” The suspicion that these cuts are driven not by necessity, but by ideology, persists.

Here’s a full list of the projects axed by the coalition:

Stonehenge Visitor Centre: £25m

Local Authority Leader Boards: £16m

Sheffield Forgemasters International Limited: £80m

Rollout of the Future Jobs Fund: £290m (previously announced)

Six month offer recruitment subsidies: £30m (previously announced)

Extension of Young Person’s Guarantee to 2011/12: £450m

Two-year Jobseeker’s Guarantee: £515m

Active Challenge Routes – Walk England: £2m

County Sports Partnerships : £6m

North Tees and Hartlepool hospital: £450m

Local Authority Business Growth Initiative: £50m (previously announced)

Outukumpu: £13m

Total: £1.9bn (£370m previously announced)

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