London's job gulf

The extent of the economic gulf between east and west London is exposed by figures released today.

Since Gordon Brown became Chancellor more than 400,000 public sector jobs have been created. However, the new study by think tank Local Futures raises fears that his strategy is making some parts of London increasingly dependent on government for future prosperity.

The Conservatives claim this should be a wake-up call to Londoners not to let the Chancellor's spending bonanza stifle private enterprise.

Unions are deciding today whether to strike over proposals to cut tens of thousands of London civil service jobs. Members of the 300,000-strong Public and Commercial Services Union are expected to back a call for industrial action, unless the plans are drastically scaled back.

The prospect of a stoppage increased after it emerged the cull could be far more extensive than had been expected. The Chancellor has already announced plans to axe 40,000 Whitehall posts and move 20,000 more out of London. But the purge could now be as high as 80,000.

In its report - Global Change, Local Strategies - Local Futures says the boom in taxpayer-funded jobs is "masking" the divide in the capital. It also warns Britain's competitiveness could be damaged if local authorities continue to rely on government to prop up the employment market.

A borough-by-borough breakdown shows that in Greenwich and Lewisham 50 per cent or more of all employment is in the public sector. Other areas of east London such as Bexley and Havering also rely heavily on the public sector.

But only five per cent of jobs in the City of London and 21 per cent in the City of Westminster are in the public sector. Ealing, Merton, Hammersmith and Fulham, Richmond and Hounslow also boast high levels of private-sector activity.

The report's author, Mark Hepworth,

said local authorities should not rely on government-funded jobs to sustain their economies. "If so much talent is locked in the public sector, you have to ask to what extent are you stifling business development in these areas," he writes.

Mr Hepworth adds: "Not only does the public sector still buffer Britain and its local economies from global market forces, it also buffers Britain from itself - the realities of deep regional and local economic divides."

Mark Field, Tory MP for Westminster and the City of London, said: "We have to make sure we encourage as many private-sector jobs as possible. They are the wealth creators of the future."