Nick Clegg struggles to contain his party's 'guilt by association' with Coalition cuts

Half a million public-sector jobs will be lost as a result of the draconian cuts to be unveiled today by George Osborne, the Chancellor, in Britain's biggest spending squeeze since the 1920s.

Other public employees will be asked to work shorter hours – and take pay cuts – to save themselves from the sack. Analysts expect another 500,000 jobs to be lost in private companies that rely on public-sector contracts or grants.

The toll of job losses, and further reductions in the welfare budget to be announced today, threaten to undermine the Coalition Government's drive to sell the £83bn cuts package as "tough but fair". The welfare budget now faces a £25bn squeeze, £13bn more than previously disclosed. Incapacity benefit for the sick and disabled could be means-tested, with people judged capable of returning to some work losing out if they have savings of more than £16,000.

Nick Clegg, the Deputy Prime Mini-ster, yesterday tried to calm jitters among Liberal Democrat MPs about the impact of the cuts – not least on the party's own electoral fortunes. He said: "The spending review provides the best evidence yet of why we are in government – and that we are delivering on our priorities."

The threat of job losses among the 5.5 million public-sector workers comes on top of a two-year pay freeze from next April for those earning £21,000 or more a year, and curbs on their pensions.

Some 42,000 jobs will be lost at the Ministry of Defence under a separate review unveiled by David Cameron yesterday. The Ministry of Justice is set to axe 14,000 posts, according to an internal memo leaked to Channel 4 News last night, including 11,000 frontline staff, such as prison and probation officers and magistrates' court officials.

The impact on employment emerged when Danny Alexander, the Treasury Chief Secretary, was photographed in his car with a briefing document summarising today's spending review. It forecast 490,000 job losses by 2014-15, and said the Government would support "voluntary deals with staff on pay restraint or reduced hours in order to save jobs". Downing Street said this "process" would be spelt out today.

Mr Clegg, who beat off a Treasury attempt to end 15 hours of free child care for all three- and four-year-olds, trumpeted Liberal Democrat "gains" in the spending review – including a £2.5bn-a-year "pupil premium" for children from disadvantaged families; protecting spending on health, overseas aid and infrastructure projects; radical welfare reform; and delaying a decision on whether to renew the Trident nuclear missile system.

In a high-risk strategy, Mr Clegg urged his MPs to share ownership of the cuts, describing them as a "Coalition process and Coalition product".

Admitting that the review involved difficult decisions, he insisted: "These are the right decisions to build a fairer and more liberal Britain."

Vince Cable, the Liberal Democrat Business Secretary, secured a last-minute reprieve to the science budget after he warned that the Treasury's planned 10 per cent reduction would harm the Government's "growth strategy". It will now drop by about 5 per cent. His department faces an overall cut of about 25 per cent.

But the Liberal Democrats' claims were called into question when Save the Children calculated that benefit cuts already in the pipeline would leave children £23bn worse off. They include the scrapping of child benefit for families with a top-rate taxpayer. The charity said Mr Clegg's £7bn "fairness premium" would "not put a hot meal on the table or buy a winter coat for the 3.9 million children who live in poverty".

Treasury sources insisted the figures for job losses were foreshadowed by the independent Office for Budget Responsibility in June. They said some of the reductions would be achieved by not replacing staff who leave and voluntary redundancies. But Labour and trade unions seized on the disclosure.

Douglas Alexander, the shadow Work and Pensions Secretary, said: "The Tories and the Liberal Democrats still seem to think unemployment is a price worth paying. They are planning to put people out of work far faster than the private sector can create jobs for them to go to. The risk is that this will make reducing the deficit even more painful."

The Shadow Cabinet agreed yesterday to brand the Conservatives and their Liberal Democrat partners as "deficit disciples" as Labour MPs answer the Coalition's charge that they are "deficit deniers".

Brendan Barber, the TUC general secretary, said: "Public-sector staff are already facing a pay freeze at a time when inflation is over target, and may face pension increases that will mean a cut in take-home pay. The sheer scale of cuts anticipated in the review make job losses inevitable."

Mervyn King, the Governor of the Bank of England, last night said the country faced a "sober" decade ahead, meaning "a decade of savings, orderly budgets and equitable rebalanacing".

Voices
On the last day of campaigning before the polling booths open, the SNP leader has written to voters in a final attempt to convince them to vote for independence
voicesIs a huge gamble on oil keeping the First Minister up at night?
Life and Style
tech

Apple has been hit by complaints about the 1.1GB download

Arts and Entertainment
Liam Neeson said he wouldn't
tv

Liam Neeson's Downton dreams

Sport
A 'Sir Alex Feguson' tattoo
football

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear
tv

Thriller is set in the secret world of British espionage

Life and Style
life

Life and Style
fashion

Bomber jacket worn by Mary Berry sells out within an hour

Life and Style
Alexander McQueen A/W 2014
fashionPolitics aside, tartan is on-trend again this season
Arts and Entertainment
Rapper Jay Z performs on the Pyramid Stage at Glastonbury in 2008
musicSinger sued over use of the single-syllable sample in 'Run This Town'
Sport
Joel jumps over the board...and into a giant hole
footballFrom joy to despair in a matter of seconds
News
i100
Arts and Entertainment
Pointless host Alexander Armstrong will voice Danger Mouse on CBBC
tv

Much-loved cartoon character returns - without Sir David Jason

Arts and Entertainment
Meera Syal was a member of the team that created Goodness Gracious Me
tv

Actress to appear in second series of the hugely popular crime drama

Arts and Entertainment
The former Doctor Who actor is to play a vicar is search of a wife
film

Matt Smith is set to join cast of the Jane Austen classic - with a twist

Life and Style
i100

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

NQT Teachers

Negotiable: Randstad Education Crawley: Randstad Education can provide you wit...

MATHS TEACHER, PERMANENT VACANCY, TONBRIDGE SCHOOL

Competitive Salary: Randstad Education Group: Randstad Education is currently ...

HR Advisor - HR Officer - Employment Law - East London - £25000

£25000 per annum + 25 days holiday: Ashdown Group: *** HR Advisor - HR Office...

ENGLISH TEACHER, FULL TIME SUPPLY ROLE, DOVER SCHOOL

Competitive Salary: Randstad Education Group: TEACHER OF ENGLISH NEEDED for lo...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week