Brown pledges tax cuts to soften downturn

(AFP/Getty Images)

The Prime Minister today promised tax cuts to boost growth in the economy as the Tories accused him of planning a "borrowing binge".

Ahead of next Monday's critical Pre-Budget Report, Mr Brown said there would have to be "fiscal expansion" to help hard pressed families and businesses.

But Tory leader David Cameron said the Government was "desperate to go on a borrowing binge," which would have to be paid for by tax rises later.

Mr Brown branded the Tories the "do nothing party" and said fiscal expansion was needed to bring back growth into the economy.

He said: "We are going to be the party that helps people through this difficult downturn.

"The Conservative Party have changed their policy yet again and now they are unable to help people."

Mr Brown again warned the Tories against "talking down" the pound and spoke of the perils of deflation.

As Commons question time got under way, Tory Philip Dunne (Ludlow) demanded: "Can you explain why the pound has lost over a quarter of its value against the US dollar in less than four months.

"Do you still believe what you said in 1992 that a weak currency arises from a weak economy, which in turn results from a weak Government?"

Amid Tory jeers, Mr Brown responded: "I would advise Conservative Members not to talk down the pound.

"And I would advise Conservative Members to take the advice of Lady Thatcher, who said that trying to help the speculators and talk sterling down is the most un-British way."

Challenged by Labour's Gordon Marsden (Blackpool S) on the need for action to help people hit by the economic crisis, the Prime Minister said: "I think what people want is real help for families and businesses now.

"People are beginning to understand that what is happening in the global economy is that while last year we had a major inflationary problem because of oil prices and food prices - in the coming year inflation will fall.

"It will enable us to put fiscal policy in support of monetary policy - and what I mean by fiscal policy is real help and real support to families and businesses now.

"That is the way for the economy to grow in the future."