Brown wields jobs axe

GORDON Brown will shock Labour's union allies next month with plans to axe a further 20,000 public sector jobs on top of the 80,000 cuts already signalled, Financial Mail has learned.

Both civil service and local government posts will be culled as the Chancellor tries to control spiralling costs and staff numbers.

His three-year Spending Review, expected in the middle of July, will see expenditure squeezed across Whitehall. Only health and education are guaranteed generous increases.

Transport, the Home Office, defence, science and housing have been promised some rises, with all other areas facing tight controls or cutbacks.

The Department of Trade & Industry is understood to be particularly vulnerable, with nearly 2,000 of its 10,520 staff threatened. The full extent of the cuts will shock civil service union leaders, who insist that any redundancies should be voluntary.

An unpublished report from the Government's efficiency adviser, Sir Peter Gershon, calls for the streamlining of public-sector purchasing, thus shrinking 'back office' staff.