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The Trades Union Congress (TUC) has called on the Treasury to limit public sector job cuts wherever possible in its pre-Budget submission.

Although acknowledging the need for public spending to be cut, the TUC argued that targeting jobs and pay in the public sector are not the best ways to tackle tight public finances.

The submission argues that, with inflation expected to fall back to the chancellor's target rate of two per cent by the end of the year current caps on public sector pay increases are not necessary.

It also cites Sir Peter Gershon's warning that quicker-than-expected job cuts will hinder rather than help reforms to the civil service.

Exploring taxation on environmental issues is the TUC's preferred way of raising revenues but TUC general secretary Brendan Barber says ministers should not be afraid of encouraging a debate on taxation to help the public sector.

"The chancellor would certainly be making a big mistake if he thinks that job and pay cuts will have no impact on the quality of public services," Mr Barber commented.

"This is why we need a new debate on tax, and in particular whether private equity and other tax avoidance measures are hitting public finances."