1.3m job losses expected from government cuts

Over 5,000 jobs lost a week by 2015 Treasury estimates

30th June 2010

Government spending cuts could result in 1.3m job losses over the next five years, leaked figures suggest.

Unpublished Treasury papers show that Chancellor George Osborne's plans to wipe the UK's deficit could cost between 500,000 and 600,000 public sector jobs and a further 700,000 in the private sector.

This amounts to nearly 5,000 job losses a week over both sectors and there are fears of public discontent, particularly in the North where there is a heavy reliance on the state for jobs and investment, and growing union militancy.

However, Treasury figures also suggest that 2.5m jobs could be created in the private sector over the next five years as the deficit is reduced and financial markets' confidence is boosted.

This would see a net rise in the number of workers in the UK, rising to 30m by 2015 up from 28.8m currently.

But the leak is likely to fuel already fiery opposition to the coalition government's plans, with Labour figures trying to persuade uneasy Liberal Democrat members to rebel against Nick Clegg and switch allegiances.

It has also been suggested that Labour sympathisers within the civil service are planning to derail the government's economic policies and create a rift between the Tories and Lib Dems.

Shadow Chancellor Alistair Darling criticised his opposite number on the findings.

He said: "Far from being open and honest, as George Osborne put it, he failed to tell the country there would be very substantial job losses as a result of his budget.

"The Tories did not have to take these measures. They chose to take them."

But government sources were quick to play down the leaked figures, saying they emphasised only one side of the argument while ignoring that a greater number of jobs would be created than those lost.

Claims Financial