UK likely to see 1.6 mn job losses on public spending cuts
The UK government's massive public spending cuts coupled with higher tax rate are likely to cost 1.6 million jobs, with the private sector expected to be hit the most, says a report.world Updated: Nov 02, 2010 19:50 IST
The UK government's massive public spending cuts coupled with higher tax rate are likely to cost 1.6 million jobs, with the private sector expected to be hit the most, says a report.
The latest estimate from UK's Chartered Institute of Personnel and Development (CIPD) released today is much higher than the official projection of about 50,000 job losses.
"Cuts in public spending and the rising rate of Value Added Tax (VAT) will result in the loss of almost 1.6 million jobs across the UK economy by 2015-16, with the private sector hit harder than the public sector," CIPD said.
VAT would be increased to 20 per cent from 17.5 per cent in January 2011.
Going by the institute's projections, the country's public sector would lose 725,000 jobs by 2015-16 while the private sector is expected to shed 650,000 during same period.
The higher VAT could affect another 200,000 jobs in the private sector.
The British government, led by Prime Minister David Cameron, is embarking on cost cutting measures as part of efforts to bring down fiscal deficit and rejuvenate the national economy.
CIPD's chief economic adviser John Philpott said the coalition government would need to stimulate private sector job creation by an average of 320,000 each year by 2015-16, which would ensure that unemployment numbers remain stable at 2.5 million.