£6bn public sector cuts is 'an economic wrong turn'

24 May 2010

The £6 billion worth of public sector cuts announced today (Monday, 24 May) shows that the coalition has taken 'an economic wrong turn' Unite, the largest union in the country, has said.

Gail Cartmail, Unite assistant general secretary for the Public Sector said: 'Within a fortnight of coming to office, the coalition government has taken a fundamental economic wrong turn by sucking £6bn out of a still fragile economy.'

'While the cuts, such as reductions in civil servants' travel, management consultants and quangos, may appear to be peripheral to the central deficit debate, this is the harbinger of some very painful cuts that will be come in the Budget on 22 June and in the comprehensive spending review in the autumn.'

Unite said there were two economic models that the government could have followed - pump priming and maintaining demand by government expenditure, or axing public services to placate the City.

Gail Cartmail said: 'The government is paying its expected homage to the City and the so-called 'markets', instead of putting the full emphasis on maintaining jobs and economic recovery.'

'Investment to stimulate the economy has to come from somewhere. If the private sector is not investing sufficiently in communities, the only other avenue is the government.'

'In many communities, the public sector is the major employer. The £6bn worth of cuts will translate into job losses very quickly, which, in turn, will add to the government's financial problems by increasing unemployment and welfare payments.'

Unite said that recent TUC research showed that 29% of public expenditure goes directly to the private sector; therefore, a 10% cut would mean a loss of £16.9bn to the private sector.

The Association for Public Service Excellence (APSE) says that for every £1 of public money invested in public services through direct employment and purchasing of supplies and services, a further 64p is generated in the local economy.

Gail Cartmail said: 'In taking the axe to the public sector, the new government is starting to abandon the Keynesian economic model – which is ironic given that Maynard Keynes was a life-long Liberal.'

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