Thursday, 28 October 2010

Government warns that private sector must pick up the slack from public spending cuts.

The Government has said that the public spending cuts announced by George Osborne could bring 490,000 public sector job losses to the UK and the private sector should benefit.

Along with the cuts, the Chancellor announced that businesses would see a £7bn tax cut in the budget with hopes to instil the promise that taxes will be lower in future.

The Telegraph reported that chief economic advisor to the Ernst & Young ITEM Club, Peter Spencer said: “The Government has bent over backwards to produce business-friendly policies…Companies now have to step up to the plate.”

Forecasting a positive economy, Spencer added: “Large companies are in excellent shape, with plenty of opportunities for investment and employment and the financial strength to exploit them.”

General secretary of the TUC, Brendan Barber disagreed, claiming that regions with weak private sectors will suffer from the cuts as they struggle to provide the resources.

Barber said: “Public sector job losses are likely to occur in some of the UK’s more depressed regions where private sector job creation is already extremely poor. Job losses will depress local economies even further.”

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