David Cameron not being 'straight' on Budget, says Harriet Harman

Acting Labour leader Harriet Harman clashed angrily with the Prime Minister today over the effect of the emergency Budget on pensioners and families.

In rowdy exchanges at Commons question time, Ms Harman repeatedly accused David Cameron of not being "straight" with the public about the impact of the Government's proposals.

She claimed restoring the earnings link would give pensioners "nothing extra" because no extra money had been set aside to pay for it.

And she insisted elderly people would be left worse off once the impact of the VAT rise was taken into consideration.

But Mr Cameron fiercely rejected her charge, saying £1 billion was being put into pensions.

He said pensions would be uprated in line with the retail price index (RPI), which was likely to be higher than earnings next year, giving pensioners a rise.

Ms Harman also claimed that families on a joint income of £30,000 could lose their tax credits under the Government's emergency package.

Launching her attack on Chancellor George Osborne's tough spending and taxation plans, Ms Harman said restoration of the earnings link for pensions was being brought forward.

"Can you tell us how much money the Treasury has set aside to pay for this next year?" she demanded.

Mr Cameron said it was "more complex" than that. "We've got a triple lock in place to make sure that the upgrade of the pension is at the highest level possible.

"So next year, because of what we expect with RPI, the pension will be upgraded with RPI - so it will be an increase.

"Perhaps you could confirm that Labour's plans were to upgrade benefits by less than CPI (consumer price index)."

Ms Harman said there was nothing complicated about the question.

"The answer is, they haven't set aside one single penny for this big promise to pensioners.

"Next year prices are due to go up more than earnings - so bringing forward the earnings link by a year doesn't give pensioners anything extra.

"Though they get nothing from that change, they will pay more in VAT.

"Are pensioners better off or worse off as a result of this Budget?"

Mr Cameron said Ms Harman had not listened to his answer before asking her next question.

"The pension will be uprated by RPI, which is likely to be higher than earnings next year.

"You ask how much money we are putting into the state pension system - £1 billion over the Parliament.

"What a contrast. In 13 years Labour never linked the pension back to earnings. We've done it in two months."

Ms Harman told him: "You aren't being straight about this. We know there won't be any increase in the pension by linking it with earnings a year early.

"You won't benefit if you are a pensioner from the cut in tax from raising the personal allowance either because you don't get that if you are over 65.

"But you will pay more VAT. The Chancellor promised to help pensioners but pensioners will be worse off under his Budget."

Mr Cameron urged her to read the Budget red book, which contains all the plans in detail, adding, to Tory laughter: "In your case, I expect it is the unread book."

He went on: "If you look at page 41, you will see £1 billion going into the state pension system this Parliament.

"What a contrast. We all remember the 75p increase for pensioners. Under our triple lock system, that can never happen again."

At this point one Tory backbencher, impressed by the Prime Minister's replies. called out "Three, nil", sparking laughter on all sides of the Commons.

But Ms Harman ploughed on, insisting: "Page 41, table 2.1, item 48, basic state pension, introduce triple guarantee, money set aside: zero."

She told Mr Cameron: "You aren't being straight about your promise to pensioners."

Turning to families with children, she said ones with an income of less than £40,000 might be "breathing a sigh of relief" that they still had their tax credits.

But, she asked: "Is that right? Can you confirm that families on less than £40,000 won't lose their tax credit?"

Mr Cameron sidestepped the question, saying: "What we are doing is making sure that the less well off families get the most money.

"What a contrast again. Since 2004 child poverty went up 100,000 under a Labour government. In this Budget child poverty doesn't go up by one single family."

Ms Harman said that despite the Chancellor's promise, the Budget "small print shows big cuts in eligibility for tax credit".

Mr Cameron had promised no family on less than £40,000 a year would lose child tax credit.

"Will you admit that is not the case and there are families on a joint income of £30,000 who will lose all their tax credits?"

The Prime Minister said the Opposition had to address the point "Who left us in this mess?

"Who left a budget deficit of £155 billion with absolutely no proposals to deal with it?"

As both Tory and Labour MPs jeered angrily at each other, Speaker John Bercow intervened to ask them to quieten down, saying: "This level of barracking is unacceptable and detested by the electorate."

Mr Cameron went on, saying: "The whole country can see what's happening here.

"One party put us into this mess. Two parties are working together to get us out of it."

Ms Harman said: "What the electorate detest is broken promises. People will want to know how your Budget will affect them.

"You weren't straight with pensioners. You weren't straight with families. You weren't straight on VAT.

"When the Chancellor got up to present his Budget he proclaimed: 'I'm not going to hide hard choices in the small print of the Budget documents, you're going to hear them straight from me...'

"But isn't the truth, that was his first promise and he broke it even before he sat down."

Mr Cameron said: "You talk about broken promises. We remember 'no more boom and bust'. What happened to that promise. We remember 'prudence with a purpose'. What happened to that.

"The fact is the Labour party have got absolutely nothing to say about the biggest problem facing this country, which is a massive budget deficit.

"They might be adopting Greek-anomics, but we're sorting out the problem."