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Public spending cuts will prompt 'double-dip recession'

14th September 2009

Public spending cuts would hinder recovery and provoke a 'double-dip recession', it has been claimed.

Trades Union Congress (TUC) general secretary Brendan Barber claims that cutting public funding would provoke a deeper and longer recession, spurred by mass unemployment, that would have economic and social consequences.

He was commenting following the publication of a new report by the TUC, which predicts that unemployment levels could increase by more than 40 per cent in cities such as Leicester, Liverpool and Middlesbrough if public spending is cut.

Meanwhile, a report published by the Institute of Directors and the TaxPayers' Alliance last week indicated that the government could save a total of GBP 50 billion by making public spending cuts, such as by cutting Child Benefit and reducing the size of the civil service by ten per cent.

The report also suggests freezing pay across the public sector for a year, while increasing employee contributions to pension schemes.

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