Government’s emergency budget is ‘unfair’

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Published: 22 Jun 2010
Author: Matthew Limb

Unions including the CSP have criticised the new coalition government's 'emergency' budget as unfair and divisive.

Chancellor George Osborne outlined a range of tax and benefit changes to reduce the deficit, describing them as 'tough' but 'progressive.'

He confirmed health expenditure will be ringfenced but other government departments could see 25 per cent cuts over four years.

Two-year pay freeze

Public sector workers face a two-year pay freeze, although those earning less than £21,000 will get a flat pay rise worth £250 in each of those years.

The basic state pension will be linked to earnings from April 2011.

Lower index to be used

 From 2011, except for the state pension and pension credit, benefits, tax credits and public service pensions will rise in line with the Consumer Price index rather than the generally higher, Retail Price Index.

This is designed to save over £6billion a year by the end of the parliament.

Other headline measures are: 

  • VAT to rise from 17.5 per cent to 20 per cent from 4 January 2011
  •  
  • Child benefit to be frozen for the next three years
  •  
  • £11billion savings from welfare benefits by 2014/15

There will be a new medical assessment for Disability Living Allowance from 2013 for new and existing claimants.

Dangerous and divisive says TUC

TUC general secretary Brendan Barber said the budget was 'economically dangerous and socially divisive.'

'Those on middle and low incomes have done worse than expected and the rich have been let off much of what they feared.'

Hit by triple whammy

Peter Finch, the CSP's assistant director of employment relations, said: 'The chancellor promised a fair deal. But in reality CSP members, along with other public sector workers, have been hit by the triple whammy of a two-year pay freeze - which completely undermines the role of the independent pay review body - a reduction in pension benefits where the link to increasing benefits to the RPI appears to have been broken, plus an increase in VAT which will fuel rising inflation.'



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Don’t target the public sector for cuts warn CSP and TUC

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