Making large-scale cuts in the public sector, reducing job opportunities for IT contractors, will not stimulate economic growth, it has been claimed.

As a means of cutting public spending to service the enormous national debt, the CBI recently proposed an immediate two-year freeze on public sector pay and a halt on recruitment, while the whole system is reformed.

However, the director of the Institute of Employment Rights Carolyn Jones said that such a move does not make economic sense.

Ms Jones suggests that the move would simply create inequality and damage morale among workers, while also leading to a decrease in consumer spending which puts the jobs of others at risk.

She added: "If we need money to service the national debt, rather than taking it from some of the lowest paid, we should increase national income.

"That could be done by taxing boardroom bonuses [and] putting in place anti-tax-avoidance measures."