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Cost of the new Budget: 1.3 million jobs
Added: 2010-07-05 11:25:00.0According to Treasury data, leaked last week, the coalition government’s new Budget will result in up to 1.3 million job losses before 2015. The data, which was picked up by the Guardian, reveals that the government expect to see 100-120,000 public sector jobs and 120-140,000 private sector jobs disappear per year as a result of the new Budget.
Whilst the large public spending cuts and subsequent public sector job cuts may have been expected, numbers this high may come as a shock to most. It is the levels expected in the private sector that may worry business owners (and especially their employees) the most. In total, the government forecasts that between 500,000 and 600,000 public sector jobs and between 600,000 and 700,000 private sector jobs will go in the next 5 years.
According to the Guardian, the losses will be largely due to the biggest reduction on public spending for 65 years. There is the obvious impact on the public sector of reduced spending; with a targeted 25% inflation-adjusted reduction in spending at Whitehall over the next few years. The private sector however will suffer through the loss of government contracts and from the knock-on impact of lower consumer spending.
Last week on the Cleardocs blog, we discussed the Budget in terms of its positive effects on small businesses with lower tax rates and lower National Insurance contributions. This new data shows the budget in a different light as no business enjoys having to lose employees. Business owners will be mindful of this data as they go forward, especially those with government contracts that may well be subject to review.
How do you feel about the Budget a week on? Are you mindful of the public sector cuts or do you feel that they don’t have any bearing on your business? Let us know by commenting below.
The content of this blog is not legal advice and should not be relied on as such, or used instead of seeking legal advice.
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