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Spending cuts “will push unemployment up to 3m”

10 June 2010

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Spending cuts by the government will push unemployment figures up to nearly three million by 2012, according to a new report.

The report, by The Chartered Institute of Personnel and Development (CIPD), also warned the cuts would “stall” a recovery in the jobs market.

The body had estimated that unemployment will hit 2.65 million this year.

But Dr John Philpott, Chief Economic Adviser at the CIPD, said that figure had now been revised.

He said he now estimated unemployment will rise to 2.95 million in the second half of 2012 and remain near that level until 2015.

There is also little prospect of real wage growth throughout this period, while public sector workers are facing pay cuts, said Dr Philpott.

“Although tough fiscal medicine is unavoidable and may boost the UK’s long-run economic growth and job prospects, reliance on cuts in public spending rather than tax increases as the primary means of cutting the deficit makes the short-term outlook especially bleak for those individuals and communities already suffering the greatest hardship in society,” he said.

“Given what we know historically about the way in which the social burden of unemployment and stagnant average income growth is shared across individuals and communities, the prospects for those already suffering the most disadvantage seem particularly bleak.”

Copyright © Press Association 2010