Britain's Chancellor George Osborne insists his austerity measures are working, despite being forced to slash growth forecast by half as he delivered his budget to the parliament on Wednesday (March 20th).

But outside the House of Commons, hundreds of union members noisily disagreed as they staged a rally protesting the government's economic policy.

The Public and Commercial Services (PCS) union staged a 24-hour walkout on the day of the budget in a dispute over pay, pensions and working conditions. Government departments and job centres were among the workplaces hit during the strike.

"He talks about a government that is creating employment, the fact of the matter is that he has cut thousands jobs from public services and the civil service since this government came to power," said Lois Austin, a PCS union official.

Unions are some businesses fear that Osborne's strict defecit-reduction by slashing spending policies will lead to another recession.

Coalition partners, the Liberal Democrats, had urged Osborne change tack and temporarily borrow more to invest in large-scale infrastructure projects to kickstart the economy.

General Secretary of the Trades Union Congress, Francis O'Grady, agrees.

"We know that temporary increase in borrowing to invest in growth is the only way we are going to mend our economy, which is broken. We look set for a lost decade unless the government changes course. Austerity has failed. Ordinary people and families are suffering," she said.

Osborne said the country's economy was now expected to grow 0.6 percent this year, half the rate predicted just three months ago, but he vowed to stick the course on austerity.

The British Chambers of Commerce (BCC) had been urging the government to be more bold in its economic vision.

"This year is really the last chance saloon for the Chancellor to kickstart growth," said John Longworth, Director of the BCC.

"We wanted a parallel growth policy as well as a deficit reduction plan. There is no question that having a situation where the Chancellor is declaring a period of austerity and slow growth, which is longer than the great depression than the 1930's is not good enough. It is not ambitious enough," he said.

He said the government needs to work with the private sector to invest in Britain's roads, rail, ports and airports to attract new investment in the UK.

"We need to actually stimulate growth in the UK and there are other economies in the world of a similar nature which are getting much better growth now than we are," said Longworth, adding that "Business can't do it entirely alone".

Britain's biggest business lobby, the CBI, has issued a supportive statement on the Budget, however.
John Cridland, the CBI Director-General, said: "The CBI was clear this Budget needed to deliver a good dose of business and consumer confidence, while being necessarily fiscally neutral. We're particularly pleased our call for a focus on the short-term boost of housing has been heeded, alongside an increase in longer-term big ticket infrastructure spending."

Presented by Adam Justice