Chancellor George Osborne blames Wolverhampton City Council for 2,000 job cuts

He says Labour-run Wolverhampton City Council has to be accountable to the city's people as it looks to make £123 million of cuts over the next five years.

The Chancellor was speaking on a visit to Banks's Brewery in the city, where he was promoting a 1p cut on the price of a pint of beer.

The local authority has blamed Government funding cuts for its financial situation which as well as seeing jobs axed has led to council tax rising and library opening hours being slashed.

But Mr Osborne said: "The whole country got into a lot of debt, the government got into debt under the Labour government so Labour need to be responsible for their own actions.

"My job has been to try and sort the country's economic problems out and that's meant difficult decisions on public expenditure.

"But ultimately the local Labour council has got to be accountable to local people for the way it's taken those decisions.

"The decisions we've taken as a Government have seen the economy grow and business expand and crucially that means people taken on."

Today council leader Roger Lawrence insisted Wolverhampton had been harder hit than other areas.

Councillor Lawrence said: "The cuts imposed on the city by the Government are unfair.

"There are other things that they can do within their spending envelope."

"Rather than making comments like that he would be better served reducing the Government bureaucracy that is one of the main barriers we are currently facing while trying to deal with this situation."

He said the city was caught in a 'double whammy of reduced resources and increased demand'. Council chiefs say their funding problems have been caused by a £147m fall in government funding by 2016. When officials announced they needed to make £123m worth of cuts in January they said unless £31m of savings could be made before 2015, it would be down to its last £620,000.

Mr Osborne, however, was keener to talk about the 1p reduction in beer duty annnounced in last week's budget.

He said: "It's quite a contrast because beer duty went up a lot under the previous Government and I've been able to cut it for the second year running."

As the Chancellor toured the brewery in Chapel Ash, Marston's confirmed it would be creating 3,000 jobs across the country over the next two years as part of its pub building programme.

The firm recently said it would accelerate adding to its 2,000 strong estate of pubs. Chief executive Ralph Findlay said the cut in beer duty would help the company plan for the future.

He added: "Marston's is creating 3,000 new jobs over the next two years in its programme to build new pub restaurants across the UK. Two consecutive budgets have been positive for the pub and brewing industry which gives the business confidence to plan continued investment."