Dai Hudd, Deputy General Secretary of Prospect, said: “On pay, pensions and jobs the Chancellor has taken direct aim at the living standards of workers who did nothing to create the economic deficit he is attempting to reverse.

“A two-year pay freeze for many of the professions we represent, working on critical government programmes, will simply turn a severe shortage into a national crisis, and make for consequent inefficiencies.”

As well as nuclear skills, Hudd cited key Ministry of Defence programmes which are still subject to delay because of a ban on external recruitment imposed for the last year. “MOD is hiding shortfalls in technical areas by spending £169m on consultants in 2008-09, and last year’s figure is expected to be still higher.

“The Chancellor fails to understand that key parts of the public sector operate in a national labour market. Freezing the pay of professionals will simply worsen recruitment shortages and drive staff out of public service.”

On public service pensions, Hudd said Prospect would be keen to respond to the Hutton inquiry announced by the Chancellor. But he called the move to CPI indexation of public service pensions “a stealth tax that undermines the credibility of the so-called independent Hutton review, where this issue should have been considered.

“We also doubt that a fair review can be carried out in the unrealistic timescale the Chancellor has laid down.”

Hudd said the key criteria for Hutton must be sustainability and fairness. “The National Audit Office and Office for Budget Responsibility reports this year have already shown the existing system is both affordable and sustainable.”

The attacks on pay and pensions are bad enough, said Hudd, without taking account of the 25% cuts in departmental spending and jobs still to be announced in the autumn.