Politics: Economy: Bruce fumes at absent Chancellor

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GORDON BROWN came under cross-party attack yesterday for trying to "play the blame game" over the worsening economic situation as he was warned that a further 500,000 jobs could be at risk.

Malcolm Bruce, the Liberal Democrat Treasury spokesman, accused the Chancellor of "seriously exaggerating" the effects of the collapse of some world economies and unproductive workers on the crisis in manufacturing and farming.

Stephen Byers, the Chief Secretary to the Treasury, agreed that some sectors of the economy would be worse hit than others, assuring MPs the Government would "never forget" the human questions involved for families and companies.

Opening the first debate on the economy since the summer recess, Mr Bruce said that Mr Brown, absent for the exchanges, was yet again "ducking" an opportunity to account for the downturn in the economy. He added: "Instead of addressing the economic problems that we are facing, the Chancellor has attempted to play the blame game.

"He has been arguing our economic problems can be blamed on a world economic slowdown and on incompetent, unproductive businesses and workers. The reality is that net we are losing 300 manufacturing jobs a day, and our farming industry faces a 50 per cent drop in farm incomes, and employment is declining rapidly too."

The forecast jobs losses would "reduce manufacturing employment to levels not seen in Britain for 150 years", Mr Bruce warned. He said the Government should ensure tax policy "helped rather than hindered" the process of cutting interest rates and make an "early commitment" to join the European single currency in order to bring down interest rates to the Euro-zone level of 3 per cent.

But the Labour MP Beverley Hughes (Stretford and Urmston) claimed that such moves would cost pounds 30-pounds 60bn and would mean 20p on the basic rate of taxation.

Mr Byers said he wanted to make "an honest and realistic assessment of the state of the economy", not "running away from the fact that within sectors certain areas were suffering hardship". But there were "underlying existing strengths" as displayed by gross domestic product figures which showed a rise across all sectors in the third quarter of the year and as a result the Government "was able to steer a course of stability in an increasingly unstable world".

He said: "As the economic weather turns, as a storm in one region threatens to spread, there are easy but dangerous shelters - a return to protectionism, the breakdown of co-operation, the rise of beggar-thy-neighbour policies. But this can only make things worse and not lead to renewed growth ... Closing off national economies only increases national and international instability."

Mr Byers promised the Government would provide practical help to communities hit by factory closures.

Saying that the productivity gap between Britain and her major competitors was "unacceptably high", Mr Byers indicated that the Chancellor would address this issue in his pre-Budget statement next week.

But Labour MP Diane Abbott (Hackney North and Stoke Newington) warned that the New Deal for the unemployed could not work "in a context of recession and the absence of growth".

David Heathcoat-Amory, Tory Treasury spokesman, claimed Mr Brown had damaged the economy by a series of mistakes which had made its whole economic strategy "unsustainable". "It was based on a growth forecast of at least 2 per cent this year and future years. No one today believes that will happen," he said.

The Government's problems over unemployment, over economic growth and over borrowing, fitted into a pattern of mistakes and broken promises, he said: "They put up and continue to put up business costs by regulation and more taxes and then they blame the managers for being greedy and the workers for being lazy ... They blame everyone but themselves."