Vince Cable 'has no idea' how many jobs will be created in the private sector

• Vince Cable admitted to MPs yesterday that he could not tell how many private-sector jobs would be created Picture: PA

Jack Dromey, a Labour member on Westminster's business, innovation and skills select committee, said some economists were forecasting that the private sector would suffer the same scale of redundancies as the 500,000 expected in the public sector.

Asked if he could put a figure on it, Cable answered: "I don't know. I have not looked at the detailed analysis involved. Obviously there is a private sector supplier role. We are looking at areas for procurement decisions."

But the Business Secretary pointed out that 150,000 private-sector jobs had been created in the past three months, fuelling hopes that the public-sector cuts would be offset by new jobs in private firms. He said the message from business was more upbeat than the more pessimistic forecasts.

Business groups such as the Institute of Directors and chambers of commerce wanted the deficit sorted out and expected there would be "substantial" new net employment in the private sector, Cable said.

He did not expect the private sector to "recoil" from the impact of the cuts in government spending, which includes a 25 per cent reduction in the department of business.

Cable said it would be tough to achieve that reduction but the government remained committed to growth. "Growth is not just about spending money, it's about the output you get for it," he told the committee.

Cable added that it was also important his department set an example on cost reduction "if you are asking for sacrifice in frontline delivery of service".

Simply cutting jobs in government departments was not simple because of the difference in pay between senior staff and other workers, he said. "Just cutting jobs is not a sensible way to downsize operations because a senior manager costs a lot more than a cleaner." Cable said.

The minister told MPs that assets held by regional development agencies (RDA) in England will be sold off when the regeneration bodies were scrapped, but any money raised might not be enough to cover their liabilities.

"It could be that their liabilities exceed the assets - there have been a lot of very bad decisions."

Dromey asked whether local RDA liabilities would be put to local use, or whether there would be a "treasury land grab".

Cable replied that winding up the RDAs was a "difficult process", which was still continuing.