In the wake of the news from the Office for Budget Responsibility (OBR) that over 600,000 public sector jobs will be lost by 2016, it has come to light that Chancellor George Osborne is expecting a balance by the formation of 2 million to 2.5 million private sector jobs over the next five to six years.
Overall with the expected loss of 600,000 public sector jobs and 700,000 private sector jobs initially there is an expectation of 2.5 million new private sector jobs leaving the economy with 1.2 million new jobs total.
These numbers are unprecedented in Britain’s recent history. In the years after the 1980′s and 1990′s recessions it took more than 11 years to create 2.5 million jobs.
David Blanchflower, a former member of the Bank of England’s interest rate-setting committee said: “There is little or no evidence that the private sector is hiring or has the plans to hire. According to the Bank of England’s agents ‘private sector employment was expected to remain broadly stable over the next six months’. The agent’s evidence is also consistent with the most recent surveys by the EU, which found that employers have few plans to hire.”
Blanchflower described the internal Treasury’s figures and those produced by OBR as “unrealistic”.
The Labour MP Chuka Umanna has stated he is going to file a freedom of information request to discover how the Treasury and OBR developed their prediction of a 2 to 2.5 million job increase.
In 1980 the Budget’s result caused hardship and civil unrest due to the state created by a government cut of 4 per cent. Osborne is seeking a 25 per cent cut. Many see the drastic 25 per cent as being “too deep and too soon”.