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Osborne’s war on wages cost £33bn

Treasury loses out on potential income tax from wage rises

CUTS-obsessed Chancellor George Osborne was exposed  yesterday for wrecking Britain’s chances of wiping out the deficit by holding down wages.

Experts revealed the Tory’s war on wages has robbed the Treasury of £33.4 billion since 2010 — more than the amount he plans to raise by cutting public spending to 1930s levels after the election.

The government’s own Office for Budget Responsibility (OBR) predicted the sum would have been collected in income tax by workers enjoying pay rises.

But a TUC study showed that  the deficit has soared to £90bn because Mr Osborne strangled wages before they could grow.

Slamming his record, TUC general secretary Frances O’Grady said: “The Chancellor has failed to reduce the deficit because of his failure to get wages growing.

“He spent the last five years shrinking pay packets and as a result he plans to spend the next five shrinking the state to a level not seen since the 1930s — before we had the NHS and welfare state safety net.”

The news comes as campaigners take to the streets across Britain as part of the TUC’s “Fair Pay Fortnight.”

They will expose how families have lost £4,000 since 2009 as wages have failed to keep up with the soaring cost of food, energy and housing.

Panicked by the relentless slump in living standards, PM David Cameron last week adopted the TUC’s own “Britain needs a pay rise” slogan as he pleaded with bosses to boost pay ahead of the general election.

The Chartered Institute of Personnel and Development warned yesterday though that the public-sector pay freeze will continue to hammer half of workers.

The TUC report also revealed that Mr Osborne forfeited £9.7bn by making unfunded tax cuts.

Added to the cash that should have been raised through wages, it would be enough to ensure that Mr Osborne had no excuse to make more spending cuts.

“We can’t cut our way to a strong economy any more than we can dig ourselves out of a hole,” added Ms O’Grady.

“More austerity will keep us stuck in a downward spiral.”

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