The Conservatives would freeze the pay and cap the pensions of public sector workers if elected, shadow chancellor George Osborne has announced.
Mr Osborne also unveiled plans to exclude middle-class families from claiming baby bonds and tax credits.
He said the so-called “austerity package” would cut the nation’s deficit by £23bn during the next parliament, adding that a further £7bn would be saved by drastically reducing the number of quangos and slashing the civil service’s budget by as much as one-third.
In his speech to the Tory conference in Manchester, Mr Osborne also confirmed plans to raise the state pension age for men from 65 to 66 in 2016, which he claimed could save £130bn in the following decade.
But after Labour claims that his proposals were unfair to women, he clarified that the female retirement age would not reach 66 until 2020 at the earliest.
The belt-tightening plans sparked fury from unions, who warned of possible industrial action, while Labour accused the shadow chancellor of taking thousands from workers in their fifties while planning tax breaks for millionaires.
But Mr Osborne insisted his proposals would share the burden of bringing down the £175bn national deficit across all parts of society, repeatedly telling delegates: “We’re all in this together.”
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“A pay freeze for one year is not unreasonable and since it apparently will not apply to those earning less than £18,000 pa, we have to recognise that the public sector is not immune to the financial problems of the rest of the country. It does, however, feel a bit like we’re in the midst of the public sector-bashing season” – Name and address withheld
“Once again the political football has been kicked in our direction. Many NHS staff and primary care workers are low paid; this is another reason why essential services, ie, NHS/police/fire and rescue should be run by an all party committee. How about clawing back the high amounts of money paid out to failing bankers/directors/executives?” – Anna Richardson, Essex