David Cameron lambasted Gordon Brown and Alistair Darling for leaving Britain ill-prepared to cope with the global economic downturn, insisting "they have left Britain running on empty".
He accused the Chancellor and the Prime Minister of years of economic profligacy claiming that "in the years of plenty they put nothing aside. They didn't fix the roof when the sun was shining". In a 13-minute Budget response that won loud cheers from Conservative backbenchers, Mr Cameron launched a major offensive on the rising cost of living for voters, saying that the Government "kicks them when they are down".
He said: "Every time they refinance their mortgage it is costing them more. Every time they fill up their car with petrol it is costing them more, every time they shop food bills are higher and yet every time they get a tax bill they are paying more.
"The cost of living is going up and Labour is making it worse. Everybody has learned the cost of living under Labour."
Mr Cameron attacked the "waste and the extravagance of the last decade". He declared: "They didn't fix the roof when the sun was shining. What better metaphor than today when it started to blow off at Number 11 Downing Street.
"What we needed in this Budget was real leadership and a serious plan to get the country out of the mess they have made.
"What we need is a Government that helps people when times are tough. Instead we have got a Government that kicks them when they are down.
"The key test of competence for any Government is not how they perform when things are going well, but how well prepared they are to cope when things get tough. The key question at these times is how much room for manoeuvre one has given oneself. The answer with the Government is, no room for manoeuvre at all."
He said: "The truth is that they have forgotten the most important rule of all: in good years you put money aside for bad years, because you cannot spend money that you have not got."
Mr Cameron condemned the Budget as "a crazy way to respond to a slowdown, hitting the very people that create the wealth, the jobs and investment that this country needs so badly". He warned: "High debt, high interest rates, high taxes and now lower growth. Those are the facts that this Budget cannot hide."
He branded Mr Darling's speech as "a dire list of reviews and re-announcements delivered with all the excitement of somebody reading out a telephone directory". But he focussed his fire on the effects for the taxpayer.
He said: "The Chancellor made one central claim at the heart of his Budget. He told us that Britain is well prepared for economic slowdown and I have to tell him he is absolutely wrong. As this country enters troubled times we could hardly be worse prepared. We have the highest tax burden in our history ... We have the highest budget deficit in Western Europe and today the Chancellor told us that borrowing would be up by £20 billion over the next four years. Those are truly dreadful figures."
Mr Cameron attacked the Government's handling of the public finances during the past decade of economic growth. He said: "While our competitors are cutting taxes on enterprise, the Chancellor confirmed he is putting taxes up.
"Capital gains tax up by £700 million – that is when we are heading for a downturn. Taxes on family businesses – up by £200m.
"Corporation tax on small businesses – that is a tax up £800m as we head for a downturn.
"It is a crazy way to respond to a slowdown, hitting the very people that create the wealth, the jobs and investment that this country needs so badly."
Mr Cameron attacked the Government's reputation for economic prowess, insisting that it had left the country ill prepared for the widely expected economic slowdown. He said: "The City may be having a credit crunch but this Government has a credibility crunch."
But the Tory leader laid the blame for the Chancellor's problems squarely at the door of the Prime Minister. He said: "Let us be in no doubt as to the real source of this Government's problem ... it comes back to one man – the Prime Minister.
"Why is the Chancellor hitting the low paid with higher tax? Because the Prime Minister put it in his budget last year.
"Why is the Chancellor left with the biggest budget deficit in Western Europe? Because the Prime Minister spent all the money in the last 11 budgets.
"Why is the Chancellor imposing an extra £1bn in taxes on capital gains tax and family businesses? Because the Prime Minister got himself in a panic trying to copy our proposals on inheritance tax."
He added: "This country shouldn't be in any doubt of the source of the difficulties Britain is now in. The Chancellor was put in a hole by the Prime Minister and they both kept digging ...
"Everyone will conclude that the Prime Minister who got us into this mess cannot possibly be the person to get us out of it."