TUC warns that spending cuts will prolong recession

A strong public sector could help lift the UK out of recession, the TUC claims.

In its Speaking up for public services pamphlet, published today, the Trades Union Congress (TUC) said that cuts in public spending will prolong the recession.

According to the TUC, for every £1 of public money invested in public services through direct employment or procurement of supplies and services, a further 64p is generated in the local economy.

The pamphlet, written for the TUC by the Association for Public Service Excellence (APSE), also says that a 10% cut in public spending would see about 200,000 public sector workers lose their jobs.

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As about 29% of public sector spending goes into the private sector, this would mean a loss of about £16.8bn in investment, said the TUC.

Paul O’Brien, chief executive of APSE, said: “While the public sector may seem a fashionable target for cuts, there is a real danger that slashing public expenditure, when the economy is on a fragile road to recovery, would lead to a ‘double dip’ in a post-recession environment.”