EU Referendum: Brexit could cost half a million public sector jobs, Labour figures warn

The statement comes as another poll suggests support for the Leave campaign is solidifying, with the 'poll of polls' standing at 52 per cent for leave and 48 per cent for remain

Nigel Farage visiting Sittingbourne for the Brexit campaign yesterday (AFP/Getty)

Over half a million public sector jobs would be at risk by more austerity if Britain votes to pull out of the European Union, Labour politicians and union leaders will warn on Tuesday.

In a statement to The Independent and signed by over thirty Labour figures including Ed Balls, Andy Burnham and Harriet Harman say that Brexit would lead to a £40 billion black hole in the British economy that would have to be filled by tax rises or public sector cuts.

They suggest that given that the Conservative Government has chosen to cut the current deficit primarily by public sector austerity this is likely to be repeated if Britain were to vote to leave.

The statement comes as another poll suggests support for the Leave campaign is solidifying. An ICM poll for the Guardian found Leave now has a 53 to 47 per cent advantage once “don’t knows” are excluded.

Prof John Curtice of Strathclyde University, who analyses all the available referendum polling data noted that, after the new ICM data, the running average “poll of polls” would stand at 52 per cent for leave and 48 per cent for remain, the first time leave has been in such a position.

The Leave lead puts pressure not just on David Cameron but also on Labour who have been accused on running a lacklustre campaign – with many of the party’s traditional supporters likely to back Brexit.

The statement on job losses is intended to appeal to those worried about what might happen if a Conservative Government was responsible for dealing with the aftermath of Brexit.

Those behind the statement point out that between 2009 and 2015, the public sector workforce fell by 969,000. Over this period the budget deficit was reduced from £103.2bn to £40.5bn.

In the case of Brexit, they say, public sector tax receipts have been predicted by the Institute of Fiscal Studies to fall by another £40 billion.

They suggest this could mean the number of public sector employees would have to fall by a further 525,000 in order to balance the books.

“Independent economic experts agree that leaving Europe could hit our economy, including the Governor of the Bank of England who warned we could go into recession,” they write.

“Britain’s vital public services like the NHS rely on a strong economy and continued investment. But if we leave the shock to our economy could see a £40bn black hole in our public finances, that would hobble our public services and affect workers on the front line. Leaving Europe is a leap into the dark and is a risk for Britain’s public services that we cannot afford to take.”

Meanwhile Jeremy Corbyn will today return to the campaign trail with a major speech on Europe following growing grumbling with his party that he is not be active enough battling for a remain vote.

At an event at the TUC Congress House Labour’s Shadow Cabinet will come together to make a joint call to Labour voters ahead of the EU referendum. The General Secretaries of some of Britain’s major trade unions will also be present to show their support.

Speaking at the event Mr Corbyn MP is expected to say they have just nine days to save Britain’s place in the EU.

“Today sees my shadow cabinet and the trade union movement join together, in the interests of the people of this country, to make Labour’s case to remain in the European Union and bring reform to strengthen workers’ rights,” he will say.

“That’s why today I am issuing a call to the whole Labour movement, to persuade people to back Remain to protect jobs and rights at work.

“We have just nine days to go to convince Labour supporters to vote Remain.”

Alan Johnson MP, Chair of Labour IN, said the fears over public sector job cuts did not amount to more project fear.

“This is an unprecedented warning from people across the Labour movement who believe in protecting our vital public services,” he said.

“It underlines the catastrophic impact that leaving the EU could have on those employed in our public sector and those who rely on it to get by.

“We already know that the economic shock of leaving Europe could push our economy into a recession and the last time our economy shrunk that fast we saw nearly a million people in the public sector lose their jobs.”