About those job losses…
Peter Hoskin 12:28am
Much ado about the Guardian's scoop this evening: a leaked Treasury document which forecasts that up to 1.3 million jobs could
be lost as a result of the spending cuts in the Budget. Or, to put it in the words of the document itself:
You can expect Labour to get stuck into these numbers, and the fact that they were previously hidden from public view, with no uncertain relish. Ed Balls has already described them as "chilling". But it's worth making a couple of points, by way of context:"100-120,000 public sector jobs and 120-140,000 private sector jobs assumed to be lost per annum for five years through cuts."
i) There's job creation too. The Guardian goes onto report that "The Treasury is assuming that growth in the private sector will create 2.5m jobs in the next five years to compensate for the spending squeeze." So that's an expected net jobs gain of 1.2 million. How much of that can be attributed to Osborne's tax cuts, rather than just untampered growth, is uncertain. But the number is certainly worth noting down.
ii) Labour job losses. Do the Treasury forecasts account for all the spending cuts over the next five years? Or do they account only for the new spending cuts announced in Osborne's Budget? You see, there's a world of difference between the two, and the Guardian doesn't make it clear which we're dealing with here. If, as I suspect, it's the former, then a large proportion of those job losses would also have occurred under Labour's proposed cuts, which Osborne simply added to last week. Indeed, it's unthinkable that the Treasury didn't produce similar job loss figures when Darling was in charge and cutting spending. But, happily for Labour, they were never leaked at the time.
In the end, I suspect that the biggest danger to the coalition will be that this undermines their claim to transparency. And it doesn't really help them to point out how Gordon Brown practically made numbers up when it came to the jobs his measures had "saved". But, despite that, the fact remains that this story may not be as awful as it first appears.
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El Sid
June 30th, 2010 1:03am Report this commentOoh - net loss of 100-120k public sector jobs per year? I wonder what implications that might have for recruitment in the public sector? Remind me again, which newspaper is most dependent on advertising for public sector jobs?
The Grauniad are talking their own book again. Their beancounters must be terrified right now.
yank
June 30th, 2010 1:38am Report this commentIf Osborne has any sense, he'll acknowledge the potential job losses.
Then, he should be truly honest, and point to the potential job losses that will occur as a result of the VAT increase he's pushing, which must surely depress the economy by removing cash from it, eliminating some private sector jobs.
So, if the public wants austerity, they have to decide whether it's to come on the public or private side, and how much from each. It'll be their choice, and the smart politician will ensure the issue is framed precisely this way, so as to give validity to his actions.
Osborne seems like a bright sort, so I'm sure he'll hit upon this approach.
Paul Hawkins
June 30th, 2010 7:09am Report this commentI think you may be misreading this. The word 'assumed' suggests it is an estimate. Ok the leftie media will take it as gospel truth. It may not mean people are made redundant but it could mean that vacanct posts are not filled and new jobs are not created. Not quite the same thing. quoting a couple of sentences from a report is not too helpful.
C Powell
June 30th, 2010 7:36am Report this commentWell, since much of Labour's extra spending went on these public sector jobs it is inevitable that when spending on the public sector is cut back, jobs will have to go. The question the Guardian and Balls never ask is whether any of these jobs were worthwhile, whether they brought any benefits to us - the public - who have been paying for them. Judging by the sorts of ads in the Guardian, the answer is no.
Osborne et al have to respond to this sort of criticism by exposing it as the special pleading it really is: too many in the public sector seem to think that its purpose is simply to provide jobs and benefits for those working in it rather than - as it should be - to provide a service to the rest of us.
charles hercock
June 30th, 2010 7:49am Report this commentWhat is chilling is remembrance of how Ed Balls propped up GB leading to the horrendous deficit in the first place.Cannot the Grauniad get real
Onlooker
June 30th, 2010 8:20am Report this commentSo, if these predictions are true:
1) There will 100-120k fewer public sector jobs each year as a result of cuts. Well, the best of those losing these will be snapped up by the companies creating the new jobs, whilst the rest of them will simply be unemployed, but being paid less money by the state for not doing anything worthwhile.
2) There will be 120-140k fewer private sector jobs as a result of cuts. Many of these will be "consultant" jobs, that are vastly overpaid appointments for very little benefit, and will not be missed. Others will be as a result of cancelling silly projects, such as the identity card scheme, and again, will not be missed. Again, the best of those losing these jobs will be re-employed in the private sector.
3) The Right Honourable Member for Morley and Outwood describes these as "Chilling". In which case, they must be good.
Bring it on!!
TrevorsDen
June 30th, 2010 8:42am Report this commentOsborne gave the net jobs figure in the budget. Jobs are created and lost all the time. Did Brown ever give a figure for private sector jobs lost and public sector ones created?
The loss of public sector jobs - or rather the transfer of them to the private sector is a financial blow to the Guardian. But seeing as how it is financially illiterate I do not think they realise this.
Roll on all public sector jobs ONLY being advertised on line.
TrevorsDen
June 30th, 2010 8:48am Report this commentDear yank - not paying off debt takes money out of the economy. It means more in debt interest repayments. The OBR forecasts growth, which common sense would imply job creation.
PS
we can be sure the Guardians headline refers to gross figures and not the difference in figures between the two budgets.
Chris lancashire
June 30th, 2010 8:54am Report this commentAs New Labour created nearly 1m extra public sector jobs a reduction by 500k will go some way to restoring some balance and helping to get the taxman off my (private sector) back.
Cuffleyburgers
June 30th, 2010 9:37am Report this commentAnd in breaking news a bear has been seen entering a wood with a roll of loo paper and a copy of the guardian - although what he needs the loo paper for is anybody's guess...
Where else were the savings supposed to come from?
The obvious point is that by reducing the tax and regulatory burgen on the private sector there will be a significant real stimulus (rather than Brown's false and expensive "stimulus") to job creation and wealth creation.
This is pathetic sloganeering by people who are demonstrably unfit to be in public office, and Osborne will certainly ignore them.
I personally am looking forward with great relish to the imminent demise of the grauniad, as are I am sure the manufacturers of loo paper.
ashley
June 30th, 2010 9:40am Report this commentFor what it's worth, the Treasury estimate is 1.3m jobs lost, over a 5 year period, and 2.5m created.
Headline : 1.2m Jobs Created by Budget.
Wouldn't that be more accurate?
Richard of York
June 30th, 2010 9:41am Report this comment@Chris lancaster
You must be very relieved about all those peoples lives being turned upside down.
If you think the taxman will leave you alone have another thunk.
Ever thought what would happen if this Tory plan goes wrong?
Wonder what 10 years of stagnation will do to the country?
Are you ready for the housing crash coming around the corner?
Rental values slashed and second home investors pension plans going breasticles aloft.
As the detail emerges its becoming clear the country is in for a roller-coaster ride. Many a mild mannered Tory will be caught up in the turmoil as will a lot of Liberal free thunkers too.
The only people with any safety are the media millionaire pundits who have gold-plated contracts and the luxury of second homes abroad to escape to.
Glad I am of to Florida.....enjoy your Austerity!
Andrew SW18
June 30th, 2010 9:46am Report this commentWell, if 1.3 million publicly funded make-work posts vanish then I, for one, am entirely chilled, Mr Balls.
Gary Williams
June 30th, 2010 10:08am Report this commentThe Tories need to do a much better job of explaining that having more "jobs" can be a bad thing. It all depends on what the jobs are.
The Labour dreamworld is one of full "employment" (of that fraction of the adult population that presumes to work). In this Labour dreamworld, half the workers spend their days digging holes in the ground, whilst the other half spend their days filling them in. Voila: full employment.
Phil QT
June 30th, 2010 10:24am Report this commentFunny how the BBC has only reported the job loss figure, no mention of the 2.5 million jobs created
Chris lancashire
June 30th, 2010 11:21am Report this commentRichard of York: It's lancashire actually. Yep, intensley relaxed as Mandy would say. The only way to go is jettison the make-jobs, retain core public services and let the private sector do what only it can - create wealth - for everyone.
libertarian
June 30th, 2010 11:23am Report this commentWhat is even funnier is how no one ever mentions the facts about the job market.
There are in fact 492,000 unfilled advertised jobs available in the UK as of May 2010. This takes no account of the unadvertised vacancies
@Richard of York.
1. I didn't see any of your posts lamenting job losses in the private sector in general and banking in particular over the last few years
2. We are constantly told that public sector salaries are so high as their staff are in demand by the private sector...so where's the problem?
3. Of the 2.1 million new jobs created over the last 13 years 1.7 million were in the Public sector and 1.4 million were filled by overseas workers ( source ONS) so one answer is that a lot of redundant public sector workers will probably return home or migrate to another EU country to find work
The main task now is to remove the dead burden of the state and create jobs and wealth by incentivising employers to hire more staff rather than putting ridiculous unjoined up regulations and taxes in their way
yank
June 30th, 2010 2:23pm Report this commentTrevorsDen: "Dear yank - not paying off debt takes money out of the economy. It means more in debt interest repayments. The OBR forecasts growth, which common sense would imply job creation."
.
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TD,
I don't disagree with you, and excessive interest payments can be considered job destruction, every bit as much as a VAT increase.
Yes, your new budget implies economic growth, but what would that growth be if there were no VAT increase? That is the important question, and the one that should drive the choice here.
I highly doubt that any of your total debt will be paid down any time soon, VAT increase or no, so the current exercise is all about avoiding additional debt, and that can only be done on the spending side, not the revenue side.
And remember that the real issue driving total debt, here as there, is the structural deficit. Here and I'd assume there as well, that structural deficit is 70% driven by the wages and benefits paid to public employees. So either you decrease their wages and benefits, or you decrease their numbers. That is the only choice available, if you're attacking the increase in total debt (assuming you don't buy into the political canards about reducing "waste, fraud and abuse").
The political framework must be set up to allow all these clear choices.
The more I think about this, the more I think Mr. Osborne is a sneaky little shite, who has gamed this thoroughly, and knows that these choices will be framed for him, and arrive back onto his desk with the public's answer, which will be anti VAT and pro public employee cuts.
Same as here, really. You just have to wait for the framing process to work itself out.
neilmack
June 30th, 2010 7:12pm Report this commentThe numbers of job losses for a given level of spending cut depend on where on the payscale the cuts take place.
If the administration has sense and humanity they'll massacre the better paid in the public sector. The country needs the streets swept. It doesn't need quangocrats and county council officials paid more than cabinet ministers.
Sorted.
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