PUBLIC-SECTOR workers and poorer families felt the pain of yesterday’s bleak “mini Budget” as the Chancellor announced an extra £30bn of spending cuts – and was warned of the risk of a fresh recession.

George Osborne delivered an autumn statement that was unremittingly gloomy, was forced to admit the British economy will barely grow next year – and to borrow an extra £111bn by 2016.

Only hours before today’s TUC day of action, public-sector workers – presently in the middle of a two-year pay freeze – were told their pay would be capped at one per cent for a further two years, until 2015.

And it could be worse for many in the North, because the Chancellor announced a shake-up that appeared to pave the way for further years of pay freezes.

Local pay awards would replace national bargaining as early as 2013, he said – amid evidence that public-sector pay was ten per cent too high in some areas, “squeezing out” private companies.

Mr Osborne pointed to a think-tank’s recommendation that there was “room for further freezes without endangering the recruitment process” in areas – such as the North-East – with lower private sector wages.

However, some of the measures announced were welcomed by the North-East’s two Local Enterprise Partnerships which, they said, are designed to help grow small to mid-sized businesses and encourage the region’s developing low carbon and offshore wind industries.

The Chancellor also: * Froze the working tax credit and axed plans for a £110 rise to the child tax credit – saving £1.3bn a year by 2015; * Brought forward the increase in the state pension age to 67 by a decade, to 2026; * Capped increases to bus fares in London, but not elsewhere in England – where they are projected to rise by 24 per cent above inflation between 2009 and 2014; * Released a map revealing that none of £5bn of much-touted new infrastructure schemes will be in the North-East; * Released an independent forecast that total public sector job losses will be 710,000 – not 400,000.

Mr Osborne slashed his growth forecast for this year, down to 0.9 per cent from 1.7 per cent, and, for 2012, down to 0.7 per cent from 2.5 per cent.

And he announced that spending cuts would continue for a further two years until 2017, to allow him to hit his economic targets – an extra £30bn of cuts.

But it was clear the forecasts rested on an end to the eurozone crisis.

The independent Office for Budget Responsibility warned there was still a one-in-three chance of recession next year, if the crisis continued.

The bleak message drowned out the good news, most of which – capping rail fare rises at six per cent in January, rather than eight per cent, scrapping next month’s 3p fuel duty rise and extra childcare places for two-year-olds – had been trailed in advance.

Mr Osborne did find an extra £1bn for the regional growth fund, hiked capital allowances for investments in the region’s new enterprise zones to 100 per cent, and announced a £250m support package for energy-intensive industries, including steel.

The basic state pension will rise by £5.30 to £107.45 next April – “the largest ever cash rise” – and benefits by 5.2 per cent, instead of being capped below inflation.

Turning on Labour’s call for more spending and slower cuts, Mr Osborne condemned “the promises of a quack doctor selling a miracle cure”.

And, pointing to the crisis in Europe, he told MPs: “We will do whatever it takes to protect Britain from this debt storm, while doing all we can to build the foundations of future growth.”

But Labour’s Ed Balls said the Chancellor’s economic plans were “in tatters”, adding: “After 18 months in office, the verdict is in – Plan A has failed and it has failed colossally.”