Public spending cuts would result in a “double-quick double dip” recession, the TUC has warned.
General secretary Brendan Barber said a 10% spending cut in public sector posts would result in more than 700,000 employees losing their jobs across the UK, as the public sector now employs seven million people.
This would result in 2.9% of the workforce being put out of work.
If they all signed on to claim unemployment benefits the number of people claiming Job Seeker’s allowance would soar by 45%, and towns such as Liverpool, Middlesborough and Leicester would see unemployment levels increase by more than 40%.
Barber’s comments come as business secretary Peter Mandelson was today due to deliver a tough message on public spending in a speech to the think-tank Progress. According to the Press Association, Mandelson was to warned of “less spending in some programmes” and admitted that some government projects may have to be scrapped.
Prime minister Gordon Brown is also expected to tell union delegates at the TUC’s annual conference in Liverpool on Tuesday that the government has “to make tough choices in public spending”, according to extracts from his speech leaked to media.
And Conservative leader David Cameron has repeatedly called for public spending cuts over the past couple of months.
Barber said: “Public spending cuts would provoke a double-quick double-dip recession. Unemployment could exceed four million and it would take many years before there was any chance of returning to anything like full employment. That would scar for life a while generation of young people.”
Barber’s comments came as the TUC launched a report, Public Sector Employment in Local Government, which analyses the effects of possible public spending cuts on the 25 local authorities with the highest levels of unemployment.
Merseyside would be the hardest hit area as it has the highest proportion of public sector jobs of any UK region. A 10% cut would result in 3.58% of the Merseyside workforce losing their jobs.
Barber added that the UK would only begin to see its way out of recession once unemployment levels began to fall – contrary to the government’s comments that the UK was “on the road to recovery”.