Kamikaze Osborne reveals new attack on poor to defend the rich

He imposed a harsh new clamp on public-sector pay and ordered the destruction of national pay bargaining.

Multimillionaire Mr Osborne told millions of public-sector workers who are currently suffering a two-year pay freeze that their pay would be capped at a measly 1 per cent for a further two years after 2013.

In a dictatorial outburst which enraged the unions, he said that pay review bodies will be asked to consider local pay differentials so that "public-sector pay can be made more responsive to local labour markets."

Civil Service union Prospect protested that its members are now facing an effective pay cut of 15 per cent.

"Our members are dismayed that on the day before they hit the streets over pensions, the Chancellor is aiming yet another punch at them," said general secretary Paul Noon.

North East Labour MP Grahame Morris warned that pay differentials would hit his struggling area very badly "and squeeze living standards even further."

Delivering his autumn statement to Parliament on the eve of tomorrow's huge public sector strike, brazen Chancellor accused the unions of "damaging our economy."

He launched a new £15 billion wave of public spending cuts, with spending dropping by nearly 1 per cent in 2015-16 and 2016-17. And he announced a saving of £59bn by bringing forward to 2026 the increase in the state pension age to 67.

Mr Osborne blamed the crisis in the eurozone for adding to Britain's problems, with his stooge Office for Budget Responsibility (OBR) slashing its growth forecast to just 0.7 per cent next year.

If the euro area failed to find a solution to its crisis, the OBR expected "a much worse outcome" for Britain, he warned.

Mr Osborne attempted a few economic conjuring tricks aimed at pumping a little life into Britain's fraying infrastructure.

But basically he rejected urgent demands for a Plan B for the economy - sticking instead to his kamikaze-style Plan A.

In a shameless performance, he promoted a massive sale of council homes declaring that the Right to Buy policy was "one of the greatest social policies of all time."

The state pension will rise by £5.30 to £107.45 next April based on September's CPI inflation index. But there will be a big cut in spending on Working Tax Credit.

Mr Osborne published a "National Infrastructure Plan" which involves cutting £5bn government spending from other programmes, plus a hoped-for longer term investment from pension funds.

"For the first time we are identifying over 500 infrastructure projects we want to see built over the next decade and beyond," he told MPs. This would involve roads, railways, airports, power stations, waste facilities and broadband networks.

A projected spending of £1bn on Network Rail will include electrifying the transpennine express between Manchester and Leeds.

And in London, the Northern Line will be extended to Battersea.

Rail fares will go up by over 6 per cent in January, instead of the planned 8 per cent, while the 3p rise in petrol prices due in January will be postponed until August.