Page last updated at 14:38 GMT, Monday, 14 April 2008 15:38 UK

Osborne attacks Brown on economy

George Osborne blames Gordon Brown for the failings in the UK economy

Gordon Brown's reputation for economic prudence is "in tatters" with families feeling the pinch of the UK's failing competitiveness, George Osborne says.

In a speech on the prime minister's handling of the nation's finances, the shadow chancellor said every one of Mr Brown's "fiscal rules" had failed.

Take home pay "has been falling for more than two years", he said.

But Mr Brown said: "We're going to continue to do everything in our power to keep the economy moving forward."

In his speech to the Policy Exchange think tank, Mr Osborne firmly pinned the blame for the present economic crisis on Mr Brown.

He said a Tory government would ease the credit crunch, improve competitiveness and get value for money for taxpayers.

'Higher taxes'

"At the root of the problem is the failure of the government's economic policy," he said.

Mr Osborne said Mr Brown had "rested his claim to competence on three pillars - stability, prudence and competitiveness".

We have been supporting the system - through the Bank of England an extra 15bn has been put in to help them get through this difficult period
Alistair Darling

"Instead, after a decade of worldwide growth, we have ended up with housing boom followed by bust, spending followed by debt, and a country finding it more and more difficult to compete," he said.

"We can now see that the fiscal rules have failed on almost every level - they lack independent credibility."

He claimed Mr Brown had "failed to fix the roof when the sun is shining", with the consequence of families having to pay higher taxes.

Billions of pounds have been spent on public services, without reform, with the result that productivity is falling, he said.

Income tax

There has also been "a total failure to tackle poor skills and the scourge of worklessness".

"Families across Britain are feeling the pinch and it's a direct consequence of our falling competitiveness," said Mr Osborne.

He said the answer to the question of what had gone wrong with Mr Brown was "his economic reputation is in tatters".

More than 70 Labour MPs were opposed to the 10p rise on the incomes of the lowest paid, he said. "How can a Labour Party fighting itself be expected to fight for the country?"

Mr Osborne said he would not spell out Conservative plans on income tax until Mr Brown calls a general election.

'Difficult time'

But he said: "On the three pillars of economic policy, we'll offer fresh thinking and learn the lessons of economic failure."

However, Yvette Cooper, Labour's chief secretary to the Treasury, retorted that Mr Osborne's "only economic policy is billions of pounds of unfunded tax promises, which would undermine economic stability and risk taking Britain back to the days of 15% interest rates and three million unemployed".

Vince Cable, the Lib Dems' treasury spokesman, said not enough was being done to avert a crisis.

Ministers have said banks and building societies must pass on interest rate cuts to borrowers in a bid to help the mortgage market.

The Bank of England has cut the base rate three times since December, but the cost of borrowing is forecast to continue rising.

Chancellor Alistair Darling said the banks had to be prepared to play their part.

"We have been supporting the system - through the Bank of England an extra 15bn has been put in to help them get through this difficult period," he told the BBC.


"In turn, we want to ensure we can help businesses, we can help individuals and homeowners by helping reopen the mortgage market and making sure the benefits of the interest rate cuts the Bank of England has been able to put in place twice this year can be passed on.

"We know this is a difficult time. We've got to get through it and we can get through it. What we are saying is - we are helping the banks, the banks have got to help people as well."

Mr Osborne's speech came as a Financial Times/Harris opinion poll suggests 68% of voters are "not confident at all" in Labour's ability to handle the crisis.

The survey also suggested that more than a third of people in the UK expected their financial position to worsen next year, although 44% said the credit crunch had so far had "no impact" on their lives.

Harris Interactive conducted the poll of 1,122 in the UK online between 27 March and 8 April.

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