The findings of Election 2010 Briefing – the Economy and Jobs are outlined by the CIPD’s chief economic adviser, Dr John Philpott. He said: “The opposition Conservative and Liberal Democrat parties should acknowledge the underlying strength of the UK labour market prior to and during the recession and the degree to which current government policy has helped curb substantially the rise in unemployment.
“The Labour Party meanwhile should accept that its record on jobs in government is blemished by a persistently high rate of ‘economic inactivity’, far too many young people not in employment, education or training, and over reliance on migrant workers.
“As for specific policy proposals, the CIPD agrees with Labour and the Liberal Democrats that it would be unwise to take action to cut the fiscal deficit in 2010-11 while the economy remains weak and is concerned that the Conservative plan to push ahead immediately with £6 billion of spending cuts would threaten the economic recovery and increase the risk of higher unemployment.
“By contrast, CIPD supports the Conservative proposal to reverse much of Labour’s planned hike in employers’ National Insurance contributions (NICs) in 2011. Although it is overly simplistic of both the Conservatives and Liberal Democrats to refer to the hike as just a ‘tax on jobs’, the CIPD opposes the planned hike on the grounds that it may have an unhelpful effect on the labour market at an early stage in what is likely to be a weak, ‘jobs light’ recovery.
“The CIPD estimates that the post-Election squeeze on public spending will be far greater than any of the main political parties is at present prepared to admit. A 10% reduction in the 5.8 million core public sector workforce is probable, the prospect of 500,000 public sector jobs being shed in the next five years dwarfing anything implicit in the Election manifestos. Moreover, it is misleading to suggest that the pain of job loss could be eased by some combination of pay cuts or short-time working. This strategy has been successful in the private sector during the recession as a means of avoiding redundancies during a cyclical downturn in the economy but is not an effective response where long-term structural change is involved.”
