Public spending cuts hurt private sector
TEXT OF STORY
STEVE CHIOTAKIS: Many European governments, including the U.K., have been looking to reduce public spending. That would include a lot of government jobs. But a report today warns about a rippling effect in the private sector that could cost as many as half-a-million more jobs.
The BBC’s Rebecca Singer reports.
REBECCA SINGER: The British prime minister plans to tighten the government’s purse strings and reduce the size of the public sector workforce. And he was relying on the country’s privately run businesses to pick up the slack. So this morning’s news may have spoiled his breakfast because the report from accountant PriceWaterhouseCoopers says his plans will hit private companies almost as hard.
John Hawksworth is the chief economist at PWC. He expects most private sector job losses to be in the construction and service industries — as building projects are canceled and contracts aren’t renewed.
JOHN HAWKSWORTH: Public sector is a huge customer for many businesses and it will be a long adjustment process to kind of wean themselves off the dependence on the public sector.
Areas like Northern Ireland, Scotland and Wales will be particularly badly hit because their local economies rely heavily on government jobs and contracts. But Hawksworth says despite the job losses, the private sector will adapt and find new opportunities to make money.
In London, I’m the BBC’s Rebecca Singer for Marketplace.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
