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Wednesday, 27 November, 2002, 18:52 GMT
Howard attacks budget 'black hole'
Michael Howard
Brown must be 'mortified' he 'got it wrong'
Gordon Brown has suffered "humiliation" by having to admit that he was "wrong" in his growth forecasts, said shadow chancellor Michael Howard.

He accused the chancellor of blaming "everyone else" but himself for plunging the country 20bn in to debt through borrowing.

How mortifying that you of all chancellors should have got it so badly wrong

Michael Howard
He questioned why Mr Brown had ignored the lower growth forecasts of independent organisations, like the Organisation of Economic Corporation and Development (OECD).

Matthew Taylor, for the Liberal Democrats, turned on the chancellor for "running out of money and running out of ideas".


Mr Howard said: "Isn't there now a black hole emerging in the public accounts, a hole entirely of the making of this Chancellor of the Exchequer? This is a moment of humiliation for you.

"You were forced to admit that your forecasts on growth were wrong, your forecasts on revenue were wrong, your forecasts on borrowing were wrong, your forecasts on your deficits were wrong.

You thought everyone else was wrong and you were right

Michael Howard
"These are the downgraded forecasts of a downgraded chancellor."

Mr Howard said the chancellor's decision to spend more contrasted with Labour's manifesto pledge in 1997 that public spending "is no longer the best measure of the effectiveness of government".

"By spending more without reform, you have locked yourself on an unsustainable course," said Mr Howard.

"If spending keeps rising so faster then the growth rate of the economy, you will have to put up taxes again."

'The posturing pair'

Mr Howard said independent forecasters had taken a "much more realistic" view of growth forecasts.

While the chancellor had predicted growth of 2.25% in 2002, independent forecasters and the OECD had stated it would be 1.9%, said Mr Howard.

"Everyone knew about this, everyone, apparently, except you.

"You thought everyone else was wrong and you were right.

"Today you have announced borrowing figures for next year of 20bn, does that no demonstrate how dramatic the deterioration of the public finances has been?"

Song dedication

Mr Howard turned on the prime minister and the chancellor to taunt: "There they sit - what a shambles, what a shower? Brown and Blair the posturing pair."

Mr Howard said the two men were good at taxing the people, spending and wasting their money, but they "are very bad at delivering the improvements the people of this country want to see."

He accused the chancellor of "trying to adjust the economic cycle to fit your fiscal policy".

And he suggested Mr Brown was keeping 100bn of his liabilities off the balance sheet "Enron-style".

Matthew Taylor
Taylor accused Brown of running out of money and ideas.
The chancellor was further mocked when Mr Howard announced that he had been "paid the supreme accolade" of having a song dedicated to him, entitled "Mr Brown You are Robbing Me".

Mr Howard said the lyrics included the lines: "Giving with one hand, taking with the other, shatter your dreams, then you run for cover."

The shadow chancellor warned: "But you have not been able to run for cover today."

'Mess and muddle'

The government was taking almost 40 a week more in tax for every man, woman and child, but while spending on the NHS was up, patients were waiting longer for treatment, Mr Howard said.

Street crime has gone up 31% in the last year and people were being discouraged from saving for their pensions.

The government has been in a "complete mess and muddle" over public sector pay rises.

Mr Howard also accused the prime minister of "indulging in thespian fantasies" by "trying to play Margaret Thatcher" over the firefighters' strike.

'Cut red tape'

Mr Taylor, for the Lib Dems, said borrowing to cover a short-term problem was the "right response to a temporary setback".

But he stressed: "Your Budget will go bust in the long-term unless you tackle the collapse in British industry and stop relying on an unsustainable boom in consumer debt to keep your growth figures up."

Mr Taylor argued that record household debt was the only reason UK growth had held up.

"This is not just a world downturn. We have a scale of manufacturing problem that is unique to Britain, that has been engineered in 11 Downing Street," he said.

Mr Brown must simplify the tax system, cut red tape and tackle the exchange rate issue or his long term plans for investment in education and health would founder.

"That is the risk you are playing today by your complacent approach where you refused to accept a single one of the problems in the British economy now can be laid at your door," said Mr Taylor.

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