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Strong public sector can help lift the UK out of recession - TUC

Nov '09
Any cutback in public spending would prolong the UK's economic agony, limit the country's ability to haul itself out of recession, reduce key services at a time when they are most in need and lead to thousands of job losses, says a TUC.

The latest in the Trades Union Congress (TUC) Touchstone series - Speaking up for Public Services - says that widespread cuts in budgets would see workers losing their jobs in the private as well as the public sector. According to the pamphlet, for every £1 of public money invested in public services through direct employment and through procurement of supplies and services, a further 64p is generated in the local economy.

Written for the TUC by the Association of Public Service Excellence (APSE), the pamphlet includes the results of a survey of 2,000 public sector employees. This finds that 92 per cent of them have seen an increased demand for their services since the recession as families struggling to get by seek help with housing problems, debt advice, training and job hunting.

Published in advance of tomorrow's latest unemployment figures, which will include a growing number of public sector job losses, the pamphlet warns that maintaining investment in public services is vital to preventing long-term unemployment and minimising the social and economic impacts of the downturn for individuals, families and communities.

Speaking up for Public Services finds that every three per cent rise in unemployment leads to a 2.7 per cent rise in heart attacks among men aged 30-44 and increases of 2.4 per cent in murders and suicides in people under the age of 64.

The TUC pamphlet also shows that the recession and rising unemployment are a major source of the increase in poverty - 70 per cent of non-working families are poor compared to only five per cent of working families. Public services are essential to preventing these social costs, says the TUC.

The pamphlet also says that a ten per cent cut in spending levels would see around 200,000 public sector workers losing their jobs. And as around 29 per cent of public sector expenditure goes into the private sector, this would mean a loss of around £16.8 billion in investment - a move which would also lead to many private sector job losses.

TUC General Secretary Brendan Barber said: 'Public spending is a key election battleground. Immediate and sweeping cuts would be disastrous for the economy, for workers and for the users of public services.

'We need the public sector more than ever in a recession. Sharp cuts in public spending would not only hit the most vulnerable in society, but would also hamper the chances of growth, increase the incidence of long-term unemployment and cause widespread job losses in both the public and private sectors.

'Unemployment is now increasing at a slower rate than many were predicting. But long-term unemployment is likely to continue rising sharply for many months to come. Cutting backon public spending would put thousands of workers at risk of permanent worklessness, risking a repeat of the enormous social and economic costs of the 1980s.'

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