Gordon Brown today condemned the Conservatives as uncaring and irresponsible for opposing his £16 billion package to save jobs and homes.

Chancellor Alistair Darling will deliver the Government’s pre-budget financial statement in the Commons tomorrow, including a massive fiscal stimulus package intended to re-energise the economy.

A temporary 2.5 per cent cut in the rate of VAT to 15 per cent, which will cost the taxpayer around £10bn, will form the centrepiece of the plans, it is understood. Further tax cuts targeted at families and the least-well-off are also expected

Mr Brown's plan to borrow more heavily to pay for the stimulus package was heavily criticised by David Cameron today, as the Conservatives resurrected one of their most successful advertising campaigns of the past, to warn voters they face a “tax bombshell” to finance the debt.

But Mr Brown not only defended the package but went on the counter attack, saying: “Those people who say 'do nothing now' would leave people, as in the 80s and the 90s, without hope that their mortgage problems could be sorted out, or their jobs problems could be sorted out. It would be lacking in compassion as well as irresponsible, in my view.”

In an interview on BBC1’s The Politics Show, Mr Brown said that leaders all around the world had agreed on the need for an injection of cash into the economy.

“Everybody generally agrees that the fiscal stimulus - and what we mean by fiscal stimulus is real help for businesses and families now - has got to be substantial to have an impact,” he said, stressing that the Government had tailored "a concerted and co-ordinated programme of action right across the board”.

The Government is expected to pump around £16 billion into the economy, in a Keynesian-style bid to spend Britain out of the downturn.

Vehicle excise duty for older vehicles may be kept at the same level, instead of the government's planned-for increase, and the government is expected to say it will offer guarantees on loans to small businesses.

A new three-month grace period for mortgage holders struggling to keep up with their repayments before repossession proceedings start has also been mooted.

The Government is likely to say that these will be paid for partly by further efficiency savings in the public sector. But debt is predicted to soar to more than £120 billion, fuelling concerns about the tax rises and spending cuts that may be necessary later.

The Tory leader today laid into the increase in debt. Mr Cameron told BBC1’s Andrew Marr show: “I think people are going to be shocked tomorrow when they see the extent of Government borrowing.

“Maybe £80 billion this year, before the recession’s even properly started, and possibly over £100 billion next year. And next year that is over £4,000 extra for every family in the country. So I do have a real concern about a Government going on a borrowing binge that even they are now admitting is going to lead to much higher taxes later.”

He added: “That actually says to people this is not a stimulus, this is actually a warning about a big tax bombshell.”

But Mr Brown denied that the big surge in debt was irresponsible. “I don’t see this as a gamble. I see this as necessary, responsible action that any sensible government would want to take," he said..

“If you say at the moment that there is nothing that government can do by spending more or investing more at the moment then that is a gospel of despair in the future.

“What I am prepared to do is take the action that is necessary, show people how over the longer-term we’ve got a plan for fiscal security and fiscal sustainability.

“Everything out there on the table, the country sees it fairly and squarely, and I believe people will say action now is better than no action and more problems later.”

Mr Darling’s package will only provide the maximum boost to the economy if people spend the extra cash rather than save it, but ministers have admitted that they cannot force people to spend.

“Every business and every family have got to make their own decisions about their household budgets," Cabinet Office Minister Liam Byrne told BBC Radio 4’s The World this Weekend.

“It’s not for the Government to tell businesses and families how to run their own finances.”

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