‘Vicious cuts hit poorest hardest’

Francis O’Grady, the first female leader of the TUC, said the Government was failing to offer the country a vision for the economy or hope for the future.

She said: “In short, our economy is sick and the Government’s medicine is not working. We were told that short-term pain would deliver long-term gain, yet all we see are nasty side-effects with no sign of a cure.

“What is worse is that we now seem to be locked into a vicious downward spiral of cuts. They are not working so the Government cuts even more.

“Reducing the living standards of some of the poorest and most vulnerable in society, while attempting to tar them all as scroungers, is perhaps the very definition of a party determined to be seen as nasty and, what is more, it will further depress demand and slow the economy.

“People on the breadline spend every penny of their income, and mainly spend it in the local economy, while those who will benefit from the cut in the 50p tax rate coming this year are as likely to save it or take it offshore.”

Ms O’Grady, who takes over from Brendan Barber, urged the Government to abandon its austerity programme, and promote a new industrial policy. The country needs a “laser-like” focus on creating decent jobs and apprenticeships, especially in parts that need them most, she said.

Workers should be given a say over top pay by being represented on remuneration committees and there should be a debate about economic democracy, or “worker voice”. She said: “My strong belief is that when we look back at the period from the 1980s to the 2008 crash, historians will see these as exceptional times, as damaging in their way as the 1930s. What will dismay them most is how slowly we are building a new economic model to replace the one that fell with Lehman Brothers. There is surprisingly broad consensus that we need real change.”

But Tory Goole MP Andrew Percy said her comments “were just a mantra that the Left liked to trot out”. He said: “Doubtless it is hard for a lot of families out there at the moment, which is due to other pressures on family budgets, rising fuel and food costs, pay freezes, a lot of which is out of the control of the Government. But every independent study shows that wealthiest groups are being hit the hardest by Government measures and that is quite right because they have the broadest shoulders.

“In cash terms Government spending will be bigger at the end of this Parliament than it was at the beginning.”

However in Hull, one of whose wards has 40 jobseekers for each vacancy, Labour councillor Phil Webster also voiced concern about benefits claimants being labelled as scroungers. He said the city’s low wage economy meant many working full-time still had to claim benefits to make ends meet.

The council, a major employer, is facing cuts of £32m over the next two years. It is to offer voluntary redundancy to 240 people in its business support section, but has warned of more job losses to come, because of the continued funding squeeze. Meanwhile because of Government cuts more than 24,000 low-income households in the city – excluding pensioners – will receive council tax bills for the first time – £1.40 a week from this April, around £3.40 next year. Coun Webster said: “There should be curbs on local government spending but what the Government is doing is targeting the most vulnerable in society and affecting the most fundamental services we provide.”