Follow our economic advice, Tories tell Brown

George Osborne said the VAT cut had failed to boost the economy (Getty Images)

Shadow chancellor George Osborne appealed to Gordon Brown today to follow the Tories' advice on the economy before he reached for the "desperate last resort" of printing money.

Mr Osborne said the Government's bank recapitalisation and VAT cut had failed to address the "root problem" of the recession - the lack of credit.

His speech in central London came during a week of fresh attacks by the Tories on the Prime Minister's handling of Britain's recession.

On Monday, Tory leader David Cameron said he felt like "shaking" Mr Brown to awaken him to the reality of the credit crunch.

Mr Osborne said today that a shortage of credit was at the heart of a "feedback loop that has cascading effects on unemployment, confidence and asset prices".

He said: "Without radical Government action, this vicious cycle will make the recession longer and deeper."

Mr Osborne also announced he had tabled an amendment to the Banking Bill in the House of Lords that would establish a National Loans Guarantee Scheme (NLGS). He said the Tories would "press our case" when Parliament returns next week.

The Tories' NLGS would provide guarantees worth up to £50 billion for lending to businesses of all sizes. This was "far larger" than the £1 billion Small Business Finance Scheme announced by Chancellor Alistair Darling in the Pre-Budget Report, Mr Osborne said.