Headlines: April 20th, 2010

Human resources professionals are warning that a rush to cut the public spending deficit after the General Election could threaten Britain’s economic recovery. The CIPD has also warned that slashing the deficit would risk a sharp rise in unemployment and that one in ten public sector jobs could go.

In an analysis of the three main parties’ pre-election policies, John Philpott, the CIPD’s chief economic advisor, said the post election squeeze on public spending would be far greater than any of them was prepared to admit. He believed it was probable the next government would have to reduce the public workforce by up to ten per cent.

That level of reduction in the 5.8 million core public sector workforce, shedding half a million jobs in the next five years dwarfed anything implicit in the election manifestos, he said and added: “It is misleading to suggest that the pain of job loss could be eased by some combination of pay cuts or short-time working.”

The CIPD, he said, agreed with Labour and the Liberal Democrats that it would be unwise to cut the fiscal deficit in this financial year while the economy was still weak and it was concerned about Conservative plans to push ahead immediately with 6 billion pounds of cuts. The Institute did support the Conservative proposal to reverse much of Labour’s planned rise in employers’ National Insurance contributions, although it was over simplistic to call the rise a tax on jobs. The CIPD, Mr. Philpott said, also supported all three parties’ enthusiasm for creating jobs in the low carbon digital and creative sectors.