Unions: the Budget rewards the wealthy and punishes the poor

"On the other hand he is taking away money from working families without any guarantee that they will be better off.

"George Osborne is big in attacking working families and young workers but he has yet to take action on the billions of public money flowing out of the country into tax havens because of the abuse of housing benefits income by private landlords."

The Public and Commercial Services union said the Budget "rewards the wealthy and punishes the poor."

PCS general secretary Mark Serwotka said: "Cutting social security support from the unemployed, the low paid, and sick and disabled people must rank among the lowest and most despicable acts of any government in recent times.

"Osborne hypocritically talks about cutting tax credits to increase wages while the last government cut living standards for civil servants by up to 20% and he now plans four more years of pay caps.

"From delays at the Passport Office to the scramble to plug gaps on HMRC phone lines, Tory cuts have hit public services we all rely on, and led to the deeply unpopular privatisation plan at the National Gallery.

"More politically-motivated cuts on this scale would devastate services and leave them vulnerable to companies looking to run them for private profit rather than public good."

Gary Porter, chairman of the Local Government Association, said: "It is right that the Chancellor has not used his Summer Budget to further reduce in-year local government funding. Councils already have to find £2.5 billion in savings this financial year and these are proving the most difficult savings to find yet.

"Councils will now be looking to the Spending Review in the autumn which will decide the future of our public services over the next decade.

"It is likely to see councils continue to face challenging funding reductions and spending pressures over the next few years."

Terry Scuoler, Chief Executive of EEF, the manufacturers' organisation, said: "The Chancellor has served up a number of aces in supporting business investment allowances, plans to cut employer national insurance contributions, phased reductions in corporation tax and funding for road improvements. His commitment to defence funding is welcome and will encourage investment in key technologies. I also support the principle of establishing a new national living wage.

"However he has double faulted on the training levy which manufacturers will be sceptical about. Until we see the detail it is not clear how this will help deliver the high quality apprenticeships we urgently need. Employers must be in the driving seat on this reform to ensure we get the right quality of apprenticeships and training. There will be no tolerance for recreating the failed skills bureaucracy of the past."

John Allen, chairman of the Federation of Small Businesses, said: "There was further support to reduce corporation tax, fix the annual investment allowance and boost regional growth, where investment in roads will be particularly well received.

"We agree with the focus on productivity but need to see the details to raise skills through the apprenticeship levy on large firms. Planning reforms are also critical to raising productivity and again we look forward to seeing the proposals on Friday.

"However, even though offset by a welcome increase in the employment allowance, some will find the new national living wage challenging. Changes to the treatment of dividends will also affect many of our members."

TUC general secretary Frances O'Grady said: "The Chancellor is giving with one hand and taking away with the other. Massive cuts in support for working people will hit families with children hardest.

"The Chancellor has finally woken up to the fact that Britain needs a pay rise. The TUC has long campaigned for the minimum wage to rise faster and the Chancellor has listened to us at last.

"For young people, it was all bad news as they will not get the minimum wage boost and will suffer from cuts to higher education grants and housing benefit. And it was not a one-nation budget for public sector workers who will face years more of cuts to real wages.

"Massive tax cuts for the wealthiest show the Conservatives are still the party of the inheritors, rather than the workers."

David Kern, chief economist at the British Chambers of Commerce said: "The OBR's new forecast for 2015 is far closer to the mark - and more in line with our own recent forecast.

"However, we believe that the OBR's growth forecasts for the next two years are to the low side, and underestimate the growth potential of the economy. If the OBR is right, however, delivery of the growth-focused initiatives announced in the Budget will be all the more important.

"We will await more detail on the Chancellor's plans to boost productivity, in particular, more on how the Government intends to address Britain's persistent current account deficit and our ever-present export gap.

"The Chancellor is right to persevere with his programme for restoring stability to public finances, and has now adopted a more realistic timetable in line with our own forecast. A slightly later budget surplus means more support for economic growth in the meantime - ensuring that deficit reduction does not hit economic activity, business confidence, or job creation."

John Cridland, director general of the CBI said: "This is a double edged Budget for business. Firms will welcome measures to balance the books and boost investment, but they will be concerned by legislating for wage increases they may not be able to deliver.

"Firms have been unwavering in their support for the Chancellor's deficit reduction plans and will welcome the clarity that the new fiscal rules provide.

"The further reduction in corporation tax is a welcome surprise but tax reductions for employers don't appear to match the businesses most affected by a rise to £7.20 in the National Minimum Wage next April - a 7% increase.

"The CBI supports a higher skilled, higher wage economy, but legislating for a living wage does not reflect businesses' ability to pay. This is taking a big gamble that the labour market can absorb year-on-year increases of an average of 6%.

"Firms want to play their part in training up more apprentices but an apprentice levy is a blunt tool. A volunteer army is always better than conscription but the CBI will work with the Government to make the best effect of this measure."

Julia Unwin, chief executive of the Joseph Rowntree Foundation said: "The Chancellor is right to focus on building a prosperous UK with higher pay and lower welfare and the role of raising pay and productivity to achieve this.

"The move to create a national wage which reflects living costs is an important and welcome recognition that the minimum wage falls well short of achieving an adequate standard of living.

"The £12 billion cuts to welfare have however been targeted at low-income working families, most of whom rely on tax credits to make work pay.

"Higher income from increasing the national minimum wage and the personal tax allowance will go some way towards closing the gap, but cutting support before the jobs market has had the chance to respond is a dangerous gamble.

"The cuts in tax credits and the reduction of the work allowance in Universal Credit, means that working families on low incomes will find it even harder to make ends meets."

Jon Sparkes, chief executive of charity Crisis, said: "These short-sighted cuts to housing benefit are likely to push more and more people into homelessness and could end up costing the taxpayer even more than they save.

"We are particularly worried about cuts to housing benefit for 18-21s. Under-25s already make up a third of homeless people and there is a real danger these changes could make things even worse.

"For many young people, living with their parents simply isn't an option. Housing benefit can mean keeping a roof over their heads while they look for work and get their lives back on track. While we welcome the proposed exemptions to protect the most vulnerable, the Government must make sure that those at risk of homelessness don't slip through the net."

Sue Brown, head of public policy at deafblind charity, said: "The news that the Government is planning to cut the work-related activity group category of Employment and Support Allowance (ESA) is yet another financial blow for disabled people. Many of whom are already struggling to make ends meet.

"Higher rates of unemployment among disabled people are not caused by the additional £30 they get from being on the Wrag (work related activity group). We know that disabled people in this group are fighting hard to get into the workplace but continue to face huge barriers, including negative attitudes from employers, failure to make reasonable adjustments in the workplace, reduced support from Access to Work and inaccessible transport.

"The needs of deafblind people we support are often complex. Most deafblind people need support with communication, accessing information and mobility. Instead of providing an incentive to move into work, cutting this benefit will have a hugely negative impact on disabled people who are already struggling to get by."

Steve Hughes, head of economics and social policy at the Policy Exchange think tank, said: "From a pay freeze to a pay rise, hard working Brits have been rewarded with a boost to their wages. Likewise small and large firms will benefit from cuts in corporation tax and national insurance.

"The critical challenge to sustained economic growth both in terms of workers' wages and GDP will be boosting productivity. The focus must be on attracting and retaining top quality teachers in schools around the country, investing in much needed road, rail and energy infrastructure and encouraging companies to make better use of technology."

The hospitality industry, which employs large numbers of low-paid workers, warned that job losses could follow the Chancellor's "living wage" announcement.

Ufi Ibrahim, chief executive of the British Hospitality Association, said: "As an industry employing a large number of individuals earning more than national minimum wage and less than the proposed living wage, we have tried to have a constructive dialogue with HM Treasury on building towards the living wage without job losses.

"We were very surprised the Chancellor made this announcement without consultation. Despite the Chancellor trying to alleviate the pain with adjustments to corporation tax and employment allowances, these changes do not go far enough to reduce the impact on SMEs and mitigate potential job losses across the industry."