Cameron steps up economy attack

David Cameron will be launching a new economic policy for the Conservatives

Conservative leader David Cameron, has accused Gordon Brown of inflicting a "terrifying" debt crisis on Britain and called the VAT cut a "joke".

Mr Cameron told BBC Radio 4's Today that Mr Brown might as well have gone out and burnt the money and said he felt like "shaking the prime minister".

He said he would set out plans to help savers in a speech later.

His criticisms came as both his party and Labour seek to gain the initiative over handling of the economic downturn.

'Debt crisis'

Mr Cameron told the BBC: "These are extraordinary circumstances we are facing, very difficult circumstances and we have to be clear about the landscape."

He said government had led the country into a "debt crisis" and the economic downturn was also a key factor.

Calling on Mr Brown to "get with the programme", he criticised government's VAT cut as a "joke"

Mr Cameron said he felt like "shaking the prime minister" and added Mr Brown might as well have gone out and burnt the money.

The Tory leader said what was needed was more saving than borrowing.

"We shouldn't use this as an opportunity to tear up the market and go back to 1970s style interventionism," he said.

David Cameron will use his speech later to claim the longer Labour are in, the worse the nation's financial situation will become.

Meanwhile Gordon Brown will be discussing help for businesses trying to cope with the economic slowdown.

This is as a prelude to a three-day tour of England and Wales by the prime minister, which will culminate in a jobs summit in Downing Street next week.

Defence

The BBC's political correspondent Reeta Chakrabarti said critics will say such activity fails to address the crux of the problem, which is the lack of the flow of credit.

Ministers are working on that, but are not yet ready with the answers, our correspondent added.

On Sunday, Mr Brown defended his handling of the economic downturn, saying the government "must play its role" and that 2009 would be "challenging and difficult".

But he insisted he was right to use fiscal policy to secure the economy and that it is his priority for the year.

The government also said it is mulling over further plans to encourage UK banks to raise lending to firms and households, with Chancellor Alistair Darling stating that pumping more state cash into banks was not the "first port of call".