June 29, 2010 / 10:49 PM / 7 years ago

Budget cuts to cost 1.3 million jobs - report

LONDON (Reuters) - The government’s tough deficit-busting budget will lead to 1.3 million job losses over five years, the Guardian reported on its website on Tuesday, citing unpublished Treasury estimates.

<p>Chancellor George Osborne (C) holds up the dispatch box with members of his team on the steps of 11 Downing Street in London, June 22, 2010. REUTERS/Paul Hackett</p>

Chancellor George Osborne unveiled a fiscal tightening package last week, slashing spending and raising taxes to wipe out a record budget deficit to almost nothing within five years.

The paper quoted a slide from an unpublished government presentation estimating 500-600,000 job losses in the public sector and a further 600-700,000 in the private sector by 2015 as a result of the cuts.

“100-120,000 public sector jobs and 120-140,000 private sector jobs assumed to be lost per annum for five years through cuts” the Guardian reported the slide as saying.

Officials expect stronger growth and an increase in the working population to result in rising employment, despite job losses from the cuts, the paper said.

The Office for Budget Responsibility (OBR) has forecast unemployment to peak at 8.1 percent in 2010 and fall over the next four years.

“The OBR forecasts unemployment to fall in every year, and employment to rise - as the Guardian article acknowledges,” a spokesman for the Treasury said.

Reporting by Caroline Copley; Editing by Bernard Orr

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