Tories slate 'Peter Pan' statement

You blew your chance, Francis Maude tells the chancellor

The Conservatives have fiercely condemned the chancellor's pre-budget statement, accusing Gordon Brown of presiding over "Peter Pan" economic policy and "fairytale" figures.

In a hard-hitting response to the statement, Shadow Chancellor Francis Maude branded Mr Brown "arrogant and complacent".

He told him: "You won't take responsibility - not even a glimmer - that your own blunders are too blame.

"You offer nothing serious. Not a single measure that will save a single job. You had a chance today to give hope to people whose livelihoods are on the line but you blew it because you are too arrogant to admit you got it wrong."

Gordon Brown and Tony Blair are accused of "smug smiles"

As Mr Brown and Prime Minister Tony Blair sat side-by-side after the chancellor had delivered his speech, Mr Maude accused them of "smugly grinning" at each other and condemned their views as "idiotic hysteria".

"Tell us, when it comes to the downturn was Britain in first and in worst? There's a simple answer and it's sitting over there. Everything you are doing is making it worse."

Even the EC predicts Britain will slump to the bottom of the European growth table, said Mr Maude.

"Why doesn't he tell us about the real budget, the cash budget - how much he's actually borrowing?" he demanded.

Borrowing dig

Tories have predicted a huge "black hole" in the public finances, warning that higher borrowing would mean higher interest rates.

"Doesn't he even understand the effects of his own policies?" he taunted.

MPs who would have to face constituents whose jobs were on the line would be disgusted, Mr Maude warned.

And he mocked the chancellor: "In your own wonderland economy, you say it's OK to borrow as long as it's for investment, but you are not borrowing for investment or health and education."

He accused Mr Brown of borrowing to pay for social security.

Gordon Brown answers his critics

In his Commons statement, Mr Brown stressed he would not be diverted from his aim of working for long-term economic stability.

He announced a series of measures to ensure work "pays more than benefits" and announced tax credits to encourage scientific innovation.

He also revealed an immediate £250m cash injection for the NHS, especially the elderly.

Mr Maude went on: "He's talked of productivity.... But this is just moving the deckchairs around on the Titanic."

He challenged Mr Brown to give an assurance not to tax pensions, to stop raising the cost of employing people and to say how much unemployment would rise next year as a direct result of his policies.

'Things can only get worse'

The chancellor had failed his first big test, the opposition spokesman said.

"They told us things could only get better but they're getting worse, much worse...No more stop-go, just the stop. Truly, this down-turn was made in Downing Street."

But Mr Brown hit back, saying Mr Maude was advocating policies which brought the UK into stop-go cycles.

He had not even acknowledged the extra cash for the NHS or Labour's spending plans.

And the chancellor listed a string of areas such as debt reduction, where he said Labour was outperforming the Tories.

Mr Maude would cut public spending but his health and education spokespeople would want it to rise, said Mr Brown.

Lib Dems' jobs warning

And some opposition MPs would want welfare spending to rise.

"In 18 months they have proved to this country they are not even fit for opposition," he said.

Conservative Sir Peter Tapsell wanted to know whether Mr Brown accepted responsibility for the "dangerously" high pound and the Bank of England's interest rate decisions.

Stop blaming others, says Malcolm Bruce

Lib Dem Treasury spokesman Malcolm Bruce welcomed the extra cash for the NHS but recalled that Mr Brown had said last year he wanted economic stability without damaging prospects.

It was clear that the chancellor's policy gap explained the economic downturn, said Mr Bruce, demanding the chancellor halted "blaming other people".

Independent forecasters regarded Mr Brown's predictions as complacent. Manufacturing job losses were running at a rate of 300 a day and were set to rise to 600 next year, he said.

And he wanted to know whether he would give the Bank of England more freedom to bring down interest rates.

Mr Brown defended his earlier statements, saying Labour was now meeting their inflation targets and creating conditions for stability and eliminated structural deficit.

Over 18 months, nearly 400,000 extra jobs had been created while Welfare-to-Work had helped more people into work than the Tories.

Labour's Barry Jones praised the statement, highlighting jobs lost in his constituency under the Tories.

Diane Abbott pleads for a wider remit on interest rates

Left-winger Diane Abbott raised the issue of the Bank of England's Monetary Policy Committee's terms of reference, asking whether they could be widened to take more account of industry.

Mr Brown reaffirmed the Bank's independence. And as a string of Tories rose to attack his policies, he repeated his insistence that the government was acting to remove the boom-bust cycles of Tory government.