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Budget ‘divisive’, say unions

Unions including the CSP have criticised some proposals in the new coalition government’s ‘emergency’ budget as unfair and divisive.

Health expenditure will be ring-fenced, but other government departments could see 25 per cent cuts over four years.

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 both years. From April 2011, the basic state pension will be linked to earnings. But benefits, public service pensions and tax credits will rise in line with the Consumer Price Index rather than the Retail Price Index, which is usually higher. This is designed to save more than £6 billion a year.

Other headline measures are: VAT to rise from 17.5 per cent to 20 per cent from January 2011; child benefit to be frozen for three years; £11 billion savings from welfare benefits by 2014/15.

There will be a new medical assessment for Disability Living Allowance from 2013, for both new and existing claimants.TUC general secretary Brendan Barber said the budget was ‘economically dangerous and socially divisive.’ 

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, a reduction in pension benefits and an increase in VAT, which will fuel rising inflation.’

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