Budget 'will cost 240,000 jobs': University study shows the effect of government spending cuts on public sector

MORE THAN 240,000 public sector jobs will be lost as a direct consequence of government spending cuts and the freeze on state-funded pay bills, according to the University of Warwick.

A study prepared for the TUC estimates that nearly 40,000 jobs will be lost in both Greater London and the South-east alone. Other areas to be hard hit, according to Warwick, are Scotland, where 29,000 redundancies are expected; the North-west, where 27,000 jobs are predicted to go; and the West Midlands and Yorkshire and Humberside, where 21,000 face the dole.

Bill Morris, general secretary of the Transport and General Workers' Union, yesterday said that widespread industrial action was now inevitable in the wake of Kenneth Clarke's Budget, in which he indicated that public sector pay increases over the next three years must be linked with increased productivity. Public sector unions, which last year protested over a 1.5 per cent pay ceiling, are attempting to organise a one-day 'general strike' in April.

Launching a TGWU pamphlet, The Big Squeeze, in London, Mr Morris said that one in four workers would suffer either directly or indirectly from Mr Clarke's policy. In places that were heavily dependent on the public sector, spending power could be reduced by up to a third, he said.

He predicted an explosion of anger next April when tax rises feed through to wage packets and salaries are frozen. The union would seek 'a coalition of service users and service providers'.

The main flashpoints would be in local government, the civil service and the National Health Service when pay negotiations started in March.

The union's report said: 'Thousands in the private and service sectors will lose their jobs if public servants suffer pay cuts and cannot spend their money buying British goods and in locals pubs, clubs and shops.'

Mr Morris said that morale among 5.8 million public servants would be damaged, leading to big recruitment and retention problems. The policy would also have a disproportionate impact on women and part-time workers.

The TGWU pamphlet complains that the same pay restraints are not being applied in private firms, particularly for senior executives and companies that donate money to the Conservative Party.

The union will ask local authorities to convene meetings of workers and members of the public throughout next year to support public services and public servants' pay.

Jack Dromey, the union's national secretary for public services, said governments had always got away with the first year of pay restraint but had come unstuck later. 'History and this Government's growing unpopularity are on our side. The public sector pay policy is doomed to failure,' he said.

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