Brown wins Commons vote on pensions

The censure motion was defeated in the Commons by 298 votes to 233, a majority of 65, following a stormy six-hour debate.

Shadow chancellor George Osborne accused Mr Brown of orchestrating "the great British pension theft" as he moved the motion of no confidence in his handling of retirement savings.

Mr Osborne told MPs the abolition of dividend tax credits in the 1997 Budget was Mr Brown's "first and worst stealth tax" and amounted to a £100bn raid on pension funds.

But the Chancellor dismissed Mr Osborne's demands for an apology and insisted the change - which the Tories were still not proposing to reverse - had boosted investment, leading to higher assets, income and dividends for pension funds. And he said that Labour had increased spending on pensioners by £11.5bn in real terms.

The debate took place as Mr Brown suffered the blow of seeing inflation rise above its 3% ceiling for the first time since he granted independence to the Bank of England in 1997.

It also followed the recent release under Freedom of Information legislation of Treasury documents which appeared to suggest Mr Brown received advice that the abolition of the credit - worth £5bn a year to pension funds - would have a damaging impact.

Flanked by Tory leader David Cameron in the Commons, Mr Osborne declared: "We have no confidence in his management of pensions. We have no confidence that he has the answers for the future. Now it is time for him to stand up and face the music - and why doesn't he begin with that simplest of words: 'sorry'?"

Mr Brown had earlier received strong support from Prime Minister Tony Blair, who hailed him as the best Chancellor since the Second World War and backed his decision on dividend tax credits.

And he was loudly cheered by Labour backbenchers in the Commons when he accused Mr Osborne of "short-term opportunism".