Thursday, July 01, 2010

We're all in this together. When I say 'we', I mean 'you.'

The Office of Budget Responsibility and the Treasury combine to predict that somewhere around 600,000 public sector posts will be efficiently saved over the next five years or so. Don't worry, the private sector is forecast to suffer the same level of efficiency.

But the best news is that the private sector will apparently create 1.3 million jobs along the way.

Obviously, Brendan Barber of the TUC attacked that forecast of a bonanza in job creation

This is not so much wishful thinking as a complete refusal to engage with reality... Much more likely are dole queues comparable to the 1980s, a new deep north-south divide and widespread poverty as the Budget's benefit cuts start to bite.
But he gets support from an unexpected sector, the chief economist from that well-known Labour front organisation, the Chartered Institute for Personnel Development.

The government thinks that just by ...tackling the deficit, there will be a vent for growth because the prospects for investments and exports will be greater. If you look at both demand in the UK economy and more globally, there is a question mark over that and if that doesn't pay off then we're going to have a much weaker employment outlook.

That figure explains the lower growth forecasts from the OBR and that also has an impact on the calculation of the structural deficit. The Tories are cutting before the situation is right for the private sector to pick up the slack -they seem to believe that the level of employment in the public sector is holding back the private sector.

I'm not sure what to call this other than idiocy, because it certainly isn't a sound economic policy.

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