Consumer debt is skewing the economy, says Cable

The government was failing to confront the growing problem of consumer debt, said Lib Dem spokesman Vincent Cable.

And business was paying the price for kicking a decision on adopting the euro "even further into the long grass".

In the Commons, Dr Cable stood in for Lib Dem leader Charles Kennedy, who has fallen foul of a "violent stomach bug".

Going downhill?

He welcomed parts of the Budget, saying the chancellor had achieved greater economic stability than seen in the Conservative years in office.

But he suggested Mr Brown's "finest hour" had been in his first week as chancellor, when he gave independence to the Bank of England and many problems had been building up ever since.

"The big decision in this Budget is not to tackle them until after the general election," said Dr Cable.

This is a real cost that is being put as a result of fudging and repeatedly postponing this euro decision Vince Cable Lib Dem Treasury spokesman

There was growing evidence of a serious imbalance caused by high levels of consumer debt and rising house prices, he argued.

The government-commissioned reports on housing shortages did not "even begin to address the problem of the speculative bubble which lies behind the housing market and which could well collapse with disastrous consequences".

Manufacturing investment had also dropped by a third in the last three years and this year there had been a record �4.6bn trade deficit.

Euro delay

Dr Cable also attacked Mr Brown's decision not to assess the possibility of British entry into the euro until the next election.

British businesses were burdened with the costs of UK staying out of the single currency and foreign businesses were opting to invest in the eurozone instead of Britain, he complained.

Cable stood in for an ill Charles Kennedy

"This is a real cost that is being put as a result of fudging and repeatedly postponing this decision," he said.

Unlike the Conservatives, Dr Cable did not think there was a crisis over borrowing and he suggested the chancellor was reining in public spending so it was in line with the growth of the overall economy.

And he suggested the Lib Dem proposals for a local income tax were "beginning to win the day" amid concerns about fairness of the council tax.

But the extra �100 pledged to pensioners aged over-70 to help with council tax bills was only "sticking plaster" to address the injustice of the current system, he argued.

Waste cuts

The Lib Dems have been calling for cuts in bureaucracy and relocation of Whitehall's civil servants.

The chancellor's plans to shed backroom staff were welcomed by Dr Cable, but he said they did not go far enough.

The Department for Rural Affairs and the Department of Trade and Industry were "grossly overstaffed" and doing far too many things.

"Tough decisions" had to be made to control public spending and ministers could not just rely on tackling waste, he added.