Axe-man ready to start the chopping

It is expected that the Chancellor of the new Con-Dem coalition government will be able to push through original pre-election Tory manifesto commitments to slash public spending after the Lib Dems reneged on their promise not to make cuts in the first year.

RMT union leader Bob Crow warned Britain is facing "fiscal fascism in all its Thatcherite glory - and, even worse, it is being propped up by the Lib Dems."

Mr Crow said: "The Tories have always been the party of mass unemployment because that suits their class and keeps the workers under the cosh."

And public-sector union Unison general secretary Dave Prentis said: "Already the new government of the rich and the right, with undisguised zeal, is plotting cuts way beyond anything that they talked of during the election campaign."

Mr Osborne attempted to draw the public's attention away from the impending assault on public services by focusing on scrapping quangos and setting up the "independent" Office for Budget Responsibility to make economic growth forecasts.

In a development which will give big business the green light to set economic policy, Mr Osborne bragged about giving up some of his powers as Chancellor.

Accusing Labour of "fiddling" the figures to hide the scale of the crisis, he said: "We need to fix the Budget to fit the figures, not fix the figures to fit the Budget."

But shadow chancellor Alistair Darling called the accusation "just plain wrong."

He added: "Every new government tries blaming the last one. This just shows the old politics is alive and well with the Lib-Con coalition."

Falling in line with the neoliberal agenda of making working people pay for the crisis, Mr Osborne said tackling the deficit was the most important thing "after 13 years of fiscal irresponsibility.

"The Treasury's assessment is that there is a strong economic case for an immediate spending reduction of £6bn," he said.

The Chancellor even suggested the coalition government's plans could "enhance" front-line services, adding: "In the end this is about value for money."

Meanwhile Lib Dem Treasury Chief Secretary David Laws attempted to distract attention from his party's back-peddling, revealing that his predecessor Liam Byrne had left a note on departing the Treasury, stating that "there is no money left."

But Mr Byrne insisted the message was meant as a private joke.

Left Economics Advisory Panel co-ordinator Andrew Fisher said: "Osborne and Laws are lining up taxpayers to be rewarded for bailing out the banks by now having their public services cut.

"The banks have not only got off scot-free but are now are now dictating how the public finances should be dictated.

"The myth that front-line services can be protected while back office support is slashed is as nonsensical as it sounds."

Communist Party of Britain general secretary Rob Griffiths said the alternative of tax increases for big business would have to be fought for by a "broad-based coalition against the cuts, nationally and in our local communities."

Mr Crow added: "The Labour movement and the community groups cannot afford to wait - we need to be preparing to fight back right now."