Launching a horrific "emergency" Budget, Chancellor Osborne charged wildly along his ruinous road, attacking public services, welfare payments, jobs, wages and pensions.

He announced a vicious programme of spending cuts and tax rises to claw back over £110 billion from the people of Britain if the Con-Dem coalition stays in power for five years.

A Treasury spokesman admitted: "This is the biggest fiscal consolidation this country has ever seen in peacetime."

Rail union RMT general secretary Bob Crow warned of "widespread industrial and community resistance" against "this assault on the British people."

Trade Union Co-ordinating Group parliamentary convenor John McDonnell MP also forecast massive resistance.

"People rightly perceive a grotesque unfairness in being forced to pay with cuts in their jobs and services for a crisis caused by the greed of the bankers," said Mr McDonnell.

Mr Osborne said government departments would suffer an average budget cut of 25 per cent over four years.

Spearheading a huge attack on jobs and services, he said spending by government departments would fall a further £17 billion over and above the £44 billion cut already planned by the new Labour government.

More details will be announced in a spending review to be published on October 20.

The multimillionaire Tory wielded his axe to please the financiers and international speculators who are demanding deep cuts plus a free rein for greedy privateers.

Unashamedly he declared: "I want a sign to go up above the British economy which says open for business."

Public-sector net borrowing will fall from a forecast £149 million this year to £20 billion by 2015-16, according to the Tory stooge Office for Budget Responsibility.

VAT will go up from 17.5 per cent to 20 per cent from January 4, and welfare benefits will be slashed by £11 billion by 2014-15.

Housing benefit will be cut by £1.8 billion, and tough new medical assessments will be introduced from 2013 for anyone claiming Disability Living Allowance.

Benefits, tax credits and public service pensions will suffer a cut of around £6 billion by the trick of uprating them in line with the generally lower consumer prices index rather than the retail price index.

But corporation tax on companies will be progressively reduced from 28p in the pound to 24p over four years. This compares with 32p under the last Tory government.

Public-sector workers will suffer a two-year pay freeze despite a current 5.1 per cent rise in retail prices and forecasts of continuing price rises.

Suggesting he was making a great concession, Mr Osborne added that 1.7 million public servants who earn less than £21,000 would receive a flat pay rise worth £250 in each of the next two years.

In line with Tory policy the Chancellor declared: "This government will not be joining the euro in this Parliament."

But as a sop to the eurofanatic Lib Dems, Mr Osborne announced a £1,000 increase in the personal tax allowance to £7,475 from next April.

The basic state pension will be re-linked to earnings, with a "triple lock" guaranteeing a rise in line with earnings, prices or a 2.5 per cent increase - whichever is greater.

And a levy on banks and building societies is expected to raise £2 billion.