Smash hit

He promised a Tory government would to “stick to fiscal responsibility”, adding: “By ensuring that we don’t borrow without limits in a recession, we will open the way to lower taxes in the recovery."

“So there’s the choice in British politics. Irresponsible borrowing now and higher taxes later under Labour.

“Or the responsible Conservative plan. Let the Bank of England cut interest rates now and lay the ground for lower taxes later.”

Speaking on BBC Radio 4 this morning, Mr Osborne said there was “great scope” for the Bank of England to further reduce interest rates, which currently stand at 4.5 per cent but are expected to lose a further half point at the next meeting in early November.

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From now on, we will be hearing little more about bipartisanship

Philip Webster, Political Editor

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Asked by how much, he said that was a judgment for the Monetary Policy Committee, but noted that the United States had recently slashed rates to a four-year low of 1 per cent.

Both Labour and the Liberal Democrats were scornful of the Shadow Chancellor's plans, with the Prime Minister claiming Mr Osborne was at odds with David Cameron over the trajectory of Tory economic policy.

Campaigning in the Glenrothes by-election, Mr Brown stuck by his policy, saying of the spending splurge charge: “He is absolutely wrong."

“What we are doing is making sure we take people fairly through a very difficult time, when national debt is low and we are able to borrow to do it.”

Other countries, including the United States, parts of Europe, Australia, China and Korea, were taking a similar path, the Prime Minister said.

Liberal Democrat Treasury spokesman Vince Cable expressed similar sentiments, saying Mr Osborne was “clearly way out of his depth."

“His arguments on how to get us out of recession are entirely incoherent. He argues against continuing Government spending on the basis that it will push up borrowing, then announces unfunded tax cuts which would do just that."

“Throughout the economic crisis George Osborne has consistently shown poor judgment, from opposing the nationalisation of Northern Rock, to advocating continued short-selling and supporting further deregulation of the City."

Mr Cable, a respected economist, called for tax cuts for those on low and middle incomes, restrictions on home reposessions and reductions in consumer energy prices.

He concluded: “After weeks of waiting for the Tories to give a hint of their economic proposals, this speech is a damp squib."

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