Run on bank was 'Brown's fault'

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Indy Politics

David Cameron has pinned the blame for the Northern Rock crisis on Gordon Brown for allowing debt levels to soar while he was Chancellor The Tory leader is calling for the Government to disclose how much it knew about the bank 's mounting problems before it sought emergency help.

The Tories sense political blood on the issue, believing it could undermine the Prime Minister 's hard-won reputation for economic competence. "Though the current crisis may have had its trigger in the US, over the past decade, the gun has been loaded at home," Mr Cameron said. "Under Labour, our economic growth has been built on a mountain of debt."

Mr Brown, who had presided over a trebling of personal borrowing to £1.3trn, had to learn that "an economy built on debt puts economic stability at risk," he said.

Writing in The Sunday Telegraph, he said: " For all its past talk of prudence, the Government has been on a spending and borrowing spree of gigantic proportions."

George Osborne, the shadow Chancellor, urged the Government to end the "speculation and rumour" over the events that led Northern Rock to approach the Bank of England.

"There is a genuine question about the handling of the economy over the last 10 years ... and whether we have created an economy built on debt, on government debt and on consumer debt," Mr Osborne told the BBC. "And whether that has left us more exposed to economic instability and to the global financial turbulence."

But Alistair Darling, the Chancellor, accused Mr Cameron of jumping on a bandwagon. "We have a fundamentally strong economy, because our banking system is much stronger than it ever was in the past," he told Sky News. "There have been shocks in the past, there will be difficulties in the future, but we can deal with those.

"I am determined as Chancellor that I will build on the stability that we've got. I will maintain a strong economy."

Vince Cable, the Liberal Democrat treasury spokesman, said the crisis had partly been caused by "greedy, irresponsible behaviour" by Northern Rock management and the weakness of banking regulation.

But he added: "It also reflects a great degree of complacency by the Government."