The Prime Minister David Cameron in his office with George Osborne on the night he became Britain's new Prime Minister, Tuesday May 11, 2010. Photo Photo credit: Andrew Parsons/Conservative Party

But will George Osborne’s austerity budget mean more or fewer jobs?

The Guardian today splashed with news that George Osborne’s austerity budget will remove “up to 1.3m jobs across the economy over the next five years”. Larry Elliott reported on a leaked Treasury assessment showing that “the government is expecting between 500,000 and 600,000 jobs to go in the public sector and between 600,000 and 700,000 to disappear in the private sector by 2015.” .

In the House of Commons, Labour’s acting leader Harriet Harman said the Budget would push many people into “abject misery“. She also asked what it would do to figures for benefit claimants. Ed Balls called Elliott’s Guardian story “chilling”.

But the Prime Minister accused Harman of scoring a “spectacular own goal” as the independent OBR [Office for Budget Responsibility] predicts unemployment will fall every year that the coalition is in power. Cameron said fewer public sector jobs would be lost under the coalition than if Labour had won the election due to the pay freeze, reported Sky News.

So who to believe? According to the conservative pundit GuidoFawkes, Larry Elliott should “know better”, having ignored a complementary Treasury prediction of 2.5 million job gains in the private sector, “giving a net gain of some 1.2 million jobs”. The blogger continued: “What is obvious to everyone is that the bloated public sector payroll is going to fall and a recovering in the private sector is expected to take up the slack. Larry has managed to set the news agenda today only by ignoring the whole story.”

Peter Hoskin in The Spectator agreed: “Much ado about the Guardian’s scoop,” he wrote. “But it’s worth making a couple of points, by way of context.” These are the likelihood job creation as the economy grows (underlined by Guido Fawkes) and the fact that “a large proportion of those job losses would also have occurred under Labour’s proposed cuts, which Osborne simply added to last week.” This story “may not be as awful as it first appears,” concluded Hoskin.

Richard Murphy at Tax Research took an opposing view, arguing that the Treasury’s prediction of 2.5 million jobs being created is predicated on 8 per cent growth in employment from new jobs. “I think that’s absurd,” wrote Murphy, and “so do the Chartered Institute of Personnel and Development.” Murphy predicted that there would be 1.6 million jobs losses with “NO net gains”, that there would be a “private sector crash” and that, because of the cost to benefits (flagged up by Harman), “little or no fall in the deficit as a result. In other words all this pain will be for nothing,” he concluded.