Labour’s Legacy: Cleaning up the Employment Mess

Posted on: 13.06.2010    09:59:56

Spending cuts will push up unemployment to 3,000,000 as vast numbers of public sector workers lose their jobs post the budget on 22nd June. It might take 6-12 months but the unemployment trend is upwards whatever the economic conditions. A “jobless recovery” has been the term coined by commentators.

The public sector could lose one in eight jobs with forecasts of between 750,000 and 1,000,000 state jobs to go is entirely believable as the axe is wielded. Many of these will see the elimination of non- jobs as Quangos bite the dust as political correctness gives way to economic reality.

State workers, who currently account for one in five of the workforce, should brace themselves for compulsory redundancies, “vacancies” left unfilled and recruitment freezes. Many have no true or transferable skills and have little prospect of finding another job. They are the hidden unemployed.

We need to get it clear in our mind that the Government can’t create jobs. As Lord Myners said in the Lords “The Government can create the environment which is conducive to the creation of jobs but it cannot create jobs and we mislead ourselves if we believe it can.” This is where Labour has gone so wrong in creating artificial employment in the public sector.

He added: ‘There is nothing progressive about a government that consistently spends more than it can raise in taxation and certainly nothing progressive that endows generations to come with the liabilities-incurred, with respect to the current generation.’ Lord Myners said that though there would have to be considerable spending cuts, there was “considerable waste in public expenditure.”

The issues of unemployment will not be solved quickly. Actions on the deficit will reduce demand feeding a potentially downward spiral which must be the Coalitions greatest fear.  State workers can also expect to be hit by pay cuts, or paltry pay rises at best and the end of unfunded inflation linked pensions, which are simply unaffordable. Private sector workers also face five years of pain, with little or no chance of a pay rise to keep up with the rising cost of living as collectively we pay our bills for Labour’s misguided spending splurge.

Government spokesmen have been preparing us for the economic pain every one of us is going too experience post the budget  but we suspect that the state of the country’s finances to be worse than disclosed to date and therefore the medicine we need to take is for pneumonia and not the common cold.

Author: Chris Slay

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