Public sector staff to lose automatic pay rise

Public sector workers face losing automatic annual pay increases as part of an £11.5bn cuts package unveiled by Chancellor George Osborne.

He also announced a cap on total welfare spending and axed winter fuel payments for expatriate pensioners in hot countries from 2015.

Welfare changes see most unemployed people having to visit a JobCentre every week instead of fortnightly.

The cuts package will cover a single financial year - 2015/16.

It was forced on the chancellor by slower than expected economic growth and deficit reduction but he insisted the economy was on the right track, telling MPs: "Britain is moving out of intensive care and moving from rescue to recovery."

But shadow chancellor Ed Balls, for Labour, said the new round of cuts represented a "comprehensive failure" of Mr Osborne's economic strategy.

Other key announcements from the chancellor's statement include:

• Total annual spending on welfare, including housing benefit, disability benefit, tax credits and pensioner benefits - but excluding the state pension - will be capped for the first time, from April 2015
• Local government will take the biggest hit with cuts at the DCLG of 10%
• The Home Office must save 6% from its budget - but the police budget will be cut by a lower 4.9% and counter terror policing will be spared
• The culture department escapes the worst of the cuts with expected savings of 7%
• Science and research funding will remain flat
• The NHS, schools in England and foreign aid, will continue to be protected from budget cuts

The security services were the biggest winners, with a 3.4% boost to funding, with Mr Osborne praising their "heroic" efforts to "protect us and our way of life"

Mr Osborne said the cuts, which will kick in just before the next general election, would ensure Britain "lives within its means", but they would be guided by fairness, economic growth and reform.