Tories demand debate as MPs head off for break

The shadow chancellor was protesting to the Speaker after ministers rebuffed Tory requests for a formal debate and vote on the £20billion mini-budget.

If Speaker Michael Martin agrees, Chancellor Alistair Darling would be hauled back to the Commons to defend and further explain the projected figures for state debt, as well as his VAT cut and future income tax rises.

MPs were furious that they were being sent away on a five-day weekend from Thursday to next Wednesday - the day of the Queen's Speech - instead of debating the pre-Budget report. It was hailed as the most significant tax-and-spend package outside a spring Budget since the crisis mini-budgets of the strike-bound Seventies.

If the tax changes were part of a spring Budget, there would be at least four days of Commons debates on the measures, with senior Cabinet ministers attending the Commons. MPs would then vote line by line on the Finance Bill enacting the changes.

Conservative whips believe a debate could be squeezed into the parliamentary timetable tomorrow, because the Opposition is willing to help speed through the Government's pensions legislation in a short time. But a Government official said there was no agreement on a PBR debate: "We have no plans to change the Commons business," he said.

Mr Osborne will argue that the immense size of the borrowing figures - up £118billion next year and by £300billion over five years - is so grave that a debate is necessary.

Earlier, the shadow chancellor said the Tories will oppose the VAT cut from 17.5per cent to 15 per cent, which will cost the Exchequer some £13billion.

He said people were "pretty shocked" by the disclosure that the country was plummeting a trillion pounds into debt.

"Every single person watching this programme owes, in effect, £34,000 on the national credit card," he told GMTV. "They are going to wake up, they are going to look at those headlines, listen to programmes like this and then realise the entire country now is very, very heavily in debt."

Mr Osborne mocked the idea that a 2.5 per cent cut in prices could revive the high streets at a time when panicky stores were offering pre-Christmas sales of 20 or 30 per cent off.

"We have got to get lending going in this economy again, you have got to get credit to small businesses, that is where the action is needed not, frankly, taking a huge risk with the public finances," he said, calling for interest rate cuts and the Government to underwrite bank loans to firms.

"These measures would do far more than a 2.5 per cent cut in VAT - a temporary cut which would be paid for later with massive tax rises."

By contrast, Mr Osborne confirmed for the first time that the Tories would not oppose the new 45p top rate of income tax for people earning over £150,000 a year. "Our priority is to help people on low incomes," he said.

The Conservatives were today claiming that the Treasury figures on who will gain and lose when taxes rise after 2011 were misleading. Mr Osborne claimed anyone earning more than £19,000 a year would be paying "higher taxes permanently".

Mr Darling hit the TV and radio studios to defend his measures as the "right thing" to help the economy through the recession. The Chancellor said the country was "moving into recession" and the choice was whether to inject money into the economy or leave people to sink or swim. "It seems only the Conservatives are saying, as they did in the Eighties and the Nineties, 'just walk away from people, leave them high and dry, let them sink or swim'," he claimed. "I just do not think that is the right thing to do. People expect the Government to help them."

Mr Darling denied that people earning below £40,000 would pay more tax and National Insurance, arguing that higher allowances for these income bands would compensate them for the rises that were highlighted by Mr Osborne.

"Of course, we have got to live within our means, so I have also had to take difficult decisions," Mr Darling said.