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Tory savings 'could mean 40,000 job cuts'

By Channel 4 News

Updated on 09 April 2010

The Conservatives’ efficiency adviser, Sir Peter Gershon, has told David Cameron to make cuts of up to £2bn in the public sector payroll, but experts warn it could mean the loss of up to 40,000 jobs, the Financial Times is reporting.

Big Ben (Reuters)

As the Conservatives prepare to broaden their assault on Labour’s "waste" by pleding to cut billions from the welfare bill, the Financial Times is reporting today that Sir Peter Gershon, David Cameron’s efficiency chief, has suggested a Tory government should cut the public payroll by up to £2bn within a year of the general election.

Experts estimate that such a saving would mean the loss of between 20,000 and 40,000 public sector jobs over the next 12 months, according to the FT. However, the Conservatives insist that redundancies are not part of their plans.

Sir Peter, a former government adviser, rejected Labour's claim that the Conservatives' proposed £12bn savings were not credible. He told the FT: "The areas that I’ve identified are additional to what the government set out in the Budget and, with focus, they are achievable."

Meanwhile, on Newsnight last night the prime minister's plans to boost  employers' national insurance contributions appeared to have been given a boost by James Caan, the Dragons Den millionaire, who told Jeremy Paxman that Labour's proposed 1 per cent increase would not be "material" to most businesses and were unlikely to stop businesses recruiting staff.

But this morning's Times is reporting that Gordon Brown pushed through the NI rise against the advice of senior Treasury officials. They apparently argued instead for an increase in VAT.

Transport Secretary Lord Adonis has appealed to Liberal Democrat voters to back Labour in order to keep the Tories out.

Writing in the Independent, the Labour peer - a former member of the Social Democratic party and an ax-Libral Democrat councillor, says: "In Labour-Tory marginals, a vote for the Lib Dems is a vote which helps the Tories against progressive policies."

He continues: "And in Labour-Lib Dem marginals every Labour MP returned is a seat in the Commons more likely to put Labour ahead of the Tories and therefore better placed to form a government."

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