Pre-Budget Statement: Opposition Reply: `Businesses now have to carry this Chancellor on their backs'

GORDON BROWN was accused by the shadow Chancellor, Francis Maude, of doing "nothing to reverse the underlying damage his policies are doing to the economy".

To Labour jeers, Mr Maude said: "This statement has one purpose and one purpose only: and that is tomorrow's headlines." The Speaker, Betty Boothroyd, had to intervene as Labour MPs continued to jeer at Mr Maude.

He went on: "In Opposition, the Prime Minister and his party opposed every reform that has made Britain competitive and his policies since then have been chipping away at the dynamism that took 18 years to build. This statement does nothing to rebuild that dynamism."

He accused Mr Brown of imposing "stealth taxes" amounting to an extra pounds 1,500 for every taxpayer, adding: "Isn't the world already tough enough for business without them having to carry the Chancellor on their back as well?

"The House can rarely have heard a Chancellor speak so complacently of an economy which last year missed a recession by a whisker."

Mr Maude listed what he claimed were Labour tax increases in a whole range of areas, and declared: "There is just one voice opposite who is prepared to tell the truth about taxation, and that is Ken Livingstone, MP for Brent East [the would-be Labour candidate for the London mayor contest]. No wonder the Prime Minister is trying to suppress him."

Mr Maude said Labour policies cost 190,000 jobs in manufacturing, and the number of business failures was continuing to rise. "Even you can't be smug about that," he told Mr Brown angrily. "Of course we support schemes to increase share ownership.

"But what happened to share-ownership since you took over? When we left office, 15 million people owned shares. Now it is 12 million."

Mr Maude said the Tories supported increases for health and education. "It is just a pity that waiting lists are longer and that class sizes are higher, that there are fewer police on the beat and crime is rising."

On welfare reform, Mr Maude accused the Chancellor of punishing people who tried to help themselves and who wanted to do the right thing, who want to work and save and who told the truth.

"This Chancellor claims to be prudent," he said. "He is only prudent with the truth. He says one thing and does another. He talks pro-business and acts anti-business. He claims taxes are falling when everyone knows they are rising. Anyone independent who tells the truth, he rubbishes.

"He is the man in the pub who says, `Give me a fiver and I will buy you a pint'. There is a new corruption investing British politics today: the corruption of the smug few who are trying to make mugs of the many."

Kenneth Clarke, the former Tory Chancellor, accused Mr Brown of using "bogus reasons" to put the target figure for safe sustainable growth back to 2.5 per cent. "Isn't this just a cynical exercise in lowering expectations and raising them again so that you can ridiculously oversell the modest recovery the economy's now having?"

Mr Clarke said despite the Chancellor's "relief" at avoiding recession "by a whisker" Britain was still being outperformed by America, France, Germany and Spain.

He had put tax burdens on business, pensions, savings and fuel "which no number of new gimmicky announcements of tax breaks, which will emerge yet again as little or nothing in practice, can correct.

"You have set this country on a course of lower expectations for future economic growth and you use smoke and mirrors to present it as a triumph."

Sarah Schaefer