Brown will raise taxes to plug 'black hole' in nation's finances, claims shadow Chancellor

Michael Howard, the shadow Chancellor, accused Gordon Brown yesterday of playing a "blame game" by claiming the slowdown in Britain was due to global economic problems.

In an interview with The Independent, Mr Howard said the slower than expected growth in Britain this year was because of the "unsustainable" strategy pursued by Mr Brown as well as the state of the world economy. When he delivers his pre-Budget report on Wednesday, the Chancellor is expected to downgrade his forecast of growth of between 2 and 2.5 per cent this year to somewhere near the 1.5 per cent predicted by the City. Mr Brown, who is likely to announce a rise in government borrowing to bridge the gap, has warned that Britain cannot be insulated from the world's "delayed economic recovery".

But Mr Howard insisted that the £15bn-a-year burden imposed on business through tax and red tape by Labour was having "a very significant impact" on competitiveness. "That is one of the reasons why the economy is not growing faster. We are sleepwalking to decline. That is because of the policies of this Government," he said.

"We cannot continue indefinitely raising public spending at a rate that is growing much faster than the economy as a whole. It is an absolutely unsustainable course." He predicted Mr Brown would trim his forecasts for growth, government revenue and borrowing. "In April, he raised his forecast for growth when most independent forecasters were reducing theirs. If they could see the storm clouds gathering over the world economy, why couldn't he?" At some point, the shadow Chancellor is convinced, Mr Brown will have a "black hole" in the nation's finances. "If he carries on spending at this rate, he will have to continue putting taxes up even further. We have already had a massively increased tax burden equivalent to £40 for every man, woman and child in the country."

Why, then, is Labour still so far ahead in the opinion polls? "Because most people are in work, their mortgage interest rates are low, the value of their houses keeps going up and they think they are well off," Mr Howard said.

He believes the Chancellor'sluck is running out. "He has had a golden legacy. That is what he has been riding for the last five years. But the consequences of his actions are now coming home to roost."

Some Tories, including Kenneth Clarke, have suggested that the Opposition is not landing enough blows on Mr Brown. "People are entitled to their views," Mr Howard said. Another criticism is that the Tories will not make headway until they reveal their policies. But Mr Howard is in no hurry. He said it was "taking some time" because the party was doing "serious work" which would "convince the people of this country that we can make their everyday lives better". Although it was not about "soundbites, slogans or headlines", he promised: "It will mark a sea change. It be the most radical set of proposals for more than a generation."

Mr Howard has downgraded the Tories' long-standing commitment to tax cuts. "I would like to go into the next election offering tax cuts, but we may not be able to do that. Dealing with the crisis in our public services is top of our list of priorities," he said.

During the recent turmoil that engulfed the Tory leader, Iain Duncan Smith, Mr Howard was touted as a possible successor. He said he would not stand for the leadership, even if Mr Duncan Smith stood down. "I have ruled that out completely," he said.

As Home Secretary in 1997, Mr Howard ruled that Myra Hindley should serve a "whole life" sentence. What did he feel when she died? "No one should take pleasure from the death of another human being. But I think she was guilty of the most dreadful crimes and it is right and proper that she was brought to justice."