We know 500,000 state employees are to lose their jobs over the next four years, at a minimum.
We know that even the likes of PWC think more will lose theirs in the private sector as a result. Well over 1.3 million people will probably be unemployed as a result of today’s cuts.
There are at least 2.5 million seeking work in the UK now. Of course not all are recognised as unemployed – but remember their number is to be boosted by 500,000 from the ranks of those on incapacity benefit. So that’s 3 million, plus 1.3 million to come – making more than 4 million in all.
And yet apparently unemployment is to fall to 1 million.
What is the private sector going to do to to pick up these jobs? What will they be selling to people who will have less money in their pockets? And why will business invest when the demand for their services will be declining?
I can see no chance at all that the private sector will make many jobs in this period.
I’m not alone. Joe Stiglitz, a Nobel laureate agrees:
Britain is embarking on a highly risky experiment. More likely than not, it will add one more data point to the well- established result that austerity in the midst of a downturn lowers GDP and increases unemployment, and excessive austerity can have long-lasting effects.
If Britain were wealthier, or if the prospects of success were greater, it might be a risk worth taking. But it is a gamble with almost no potential upside. Austerity is a gamble which Britain can ill afford.