Unions criticised “economic illiteracy” of proposals expected in this afternoon’s Budget to cut spending on government departments by £2.5bn
In a series of briefings ahead of the Chancellor’s statement to MPs, Treasury officials said the spending cuts would be used to fund new infrastructure projects.
TUC general secretary Frances O’Grady said:“With the economy stagnating, the pressure is on the Chancellor to deliver a pro-growth Budget.
“Spending just £2.5bn a year more on infrastructure projects will boost growth by a measly 0.06 per cent.
“Worse still, funding it through departmental spending cuts will mean further reductions in public services.“
Unions believe real-terms negative interest rates should give George Osborn an opportunity to invest, rather than raiding departmental budgets to cover what they say is a failed economic strategy.
Analysts say the expected £2.5bn quoted will not be enough to have the impact which ministers claim for it.
Unite is calling for the Coalition to add £1 to the National Minimum Wage to tackle low pay across the economy and to boost consumer spending.
UNISON says the threat to end pay progression will “pile ever more of the cost of the financial crisis” onto public sector workers.
General secretary Dave Prentis said: “It is clear George Osborne doesn’t understand the first thing about how pay progression works in the public or the private sector.
“Is he really suggesting that a newly qualified nurse, social worker or engineer comes into a job with the same knowledge and experience as someone at the top of their grade?
“If the Chancellor really wants to end pay progression, employers will have to pay the rate for the job from day one.
“Instead of targeting hard pressed public service workers – yet again – the Chancellor should focus on where the big money is – the telephone number bonuses still rife across the city and elsewhere.
“For public service workers who have had their pay frozen for three years and are now being offered 1%, a bonus is not an option.”
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