The Institute of Economic Affairs said Mr Osborne was being too kind to pensioners by giving them an above-inflation increase in the state pension.
Professor Philip Booth, editorial director at the IEA, said: “Once again, the government must answer questions as to why older people are being treated differently from younger people in the attempts to cut government spending.
“The attempts to reduce the benefits bill are welcome but, at the same time, the government will be increasing pensions by more than both inflation and wage increases.
“This will lead to extra spending commitments year after year and potentially less room for tax cuts.”
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