TUC warns of double-dip recession and 4m unemployed

Kay Mitchell | | 0 Comments

According to the TUC’s general secretary, Brendan Barber, Britain could be faced with a “double-quick, double-dip” recession if future Governments try to cut public sector jobs.

The TUC leader described the outlook as “very precarious” and cuts in public spending could result in over four million people unemployed.

Official figures show that unemployment increased by 220,000 to 2,435,000 in the three months to June, and takes the unemployment rate to 7.8%.

The Centre for Economics and Business Research recently predicted that unemployment could reach 4 million – worse than the record high in the 1980s under Margaret Thatcher’s leadership.

Meanwhile, speaking prior to the TUC Congress in Liverpool, which starts tomorrow, Mr Barber said a 10% reduction in the public sector workforce would mean 700,000 more unemployed and would send Britain back into recession.

However, Prime Minister Gordon Brown, who will speak at the conference on Tuesday, is expected to deliver an upbeat message that the economy is “on the road to recovery”.

Mr Brown is also expected to say that frontline jobs will be protected and urge TUC members not to disrupt the Government’s efforts with industrial action.

Mr Barber comments: “Cut the stimulus off and the economy would go into decline again. Public spending cuts will provoke a double-quick, double-dip recession.

“Unemployment could well exceed four million and it would take many years before there was any chance of returning to anything like full employment. That would scar for life a whole generation of young people“, he adds.

Public spending looks set to be top of the agenda in the build-up to the next general election.

According to the Conservatives, the Government is gathering too much debt, but in response, Labour says the Conservatives would cut funding for projects which are crucial to economic recovery.

In other news this weekend, a report from Jones Lang LaSalle is predicting that UK house prices could fall significantly over the next 18 months.

The firm’s head of the residential department, James Thomas, says: “The economic fundamentals that have supported the upturn, most notably the constrained supply of housing for sale, will be eroded as unemployment hits a peak and while mortgage lending remains weak.”

He adds: ‘While the recent improvement in the market is encouraging, it is impossible to ignore the short-term risks posed to the UK residential sector by rising unemployment and poor credit availability.”

Tags: Brendan Barber, cuts, double dip, public sector, recession, spending, TUC, unemployed, warning