The response: Tories attack 'borrowing binge'

George Osborne condemned Alistair Darling for producing "a precision-guided missile aimed at the heart of a recovery", as he tore into the Government for planning tax rises to pay for billions in borrowing to help the economy out of recession.

The shadow Chancellor delighted the Conservative benches as laid into what he called an "unexploded tax bombshell" which he said would explode when the economy started to recover after the next election.

He said: "The choice at the next election could not be clearer – a record borrowing binge and a lifetime of tax rises under Labour, or fiscal sanity and lower taxes that last under the Conservatives." In an aggressive performance that won plaudits from Tory colleagues, Mr Osborne condemned "Labour's decade of irresponsibility", insisting that the national debt would climb to £1 trillion.

Attacking Mr Darling's plans, Mr Osborne told MPs: "He could have got a grip on Government spending so that, in future, the state lives within the country's means."

He continued: "Instead he offers temporary tax give-aways paid for by a lifetime of tax rises for the British people. The national debt doubled, and the future mortgaged to bail out the mistakes of the past. This is exactly the road Britain is now on with this Prime Minister and this reckless Budget."

Mr Osborne told MPs that many measures contained in the pre-Budget report were designed to compensate people for the earlier abolition of the10 pence tax band.

He said: "The Labour MPs opposite cheered these measures when they were introduced, and now they cheer them when they are scrapped. I doubt the rest of the country will be so pathetically grateful that the Chancellor is going to wait a year or two before clobbering their family cars and empty properties and small businesses."

One shadow minister said: "That was George's best performance. He isn't the most loved person in the team but he is getting respect."

Iain Duncan Smith, the former party leader, added: "George did very well. He set out how bad the position is ... The Government has embarked on an astonishing level of tax-and-spend that made my jaw drop."

Vince Cable, the Liberal Democrat Treasury spokesman, dismissed short-term tax cuts as "pathetic": "This is not a normal pre-Budget statement, this is a national economic emergency and what is required – alongside radical cuts in interest rates, radical action on bank lending – is a serious tax cut concentrating on the low-paid. He added: "The Prime Minister tours the world a little bit like a celebrity heart surgeon, lecturing the uninitiated on how to carry out financial heart transplants.

"But meanwhile the patient back here is suffering very badly because the banks are cutting credit and greatly increasing their margins."