"Demolition day" for Brown's tax and spend policies

The Governor of the Bank of England has called on Labour to set tougher goals to reduce the "extraordinary public debt".

This stark warning from the Governor, Mervyn King, comes on the same day as new figures show that Britain is facing the biggest deficit in the world.

George Osborne said, "This is the demolition day for Gordon Brown's tax and spending policies."

And the Shadow Chancellor added, "We urgently need an election to rescue this country from a government whose denial is a danger to the recovery."

Getting out of Westminster

I believe this week has marked a defining moment in this economic crisis. For Mervyn King, the Governor of the Bank of England, to come out and say Gordon Brown is wrong to be pursuing a second fiscal stimulus - because the country simply cannot afford it - is an exceptional turn of events. Gordon Brown harangued us for being isolated when we repeatedly said the country could not afford this extra debt. Now it turns out we were right.

I kicked off the week by replying to Gordon Brown's statement on Europe - which brings me on to Dan Hannan's brilliant response to Gordon Brown in the European Parliament. It was so effective and shows the growing power of the internet over TV.

On Tuesday I was at the London Stock Exchange (watch the video here) to make the point that the Conservative Party will be the party of law and order in the City. I then completed my 26th Cameron Direct in Milton Keynes, and the 27th in Fleetwood, Lancashire. I love doing these events: they are an essential reminder that what goes on in the Westminster bubble is rarely what is on the minds of ordinary people.

Getting out of Westminster has been a key theme to the week. Gordon Brown's approach to this may be getting on a plane and heading for Chile - but mine is to send the Shadow Cabinet round the country to launch our petition calling on Gordon Brown to implement our tax cut for savers and pensioners. And we all finished up in Preston for a Shadow Cabinet meeting on Friday morning.

Next stop Wales, when I address our Welsh conference on Sunday.

Have a good weekend.

Gordon Brown is looking a bit lonely at the moment

Every now and again, everyone comes to a point in their lives where they realise that they are wrong about something really important. It is time overdue for Gordon Brown to accept not just that he has made some mistakes with the countries economy but that he is in fact pretty damned crap with money and that his management of the UK's finances over the last three New Labour terms in office have exposed this country to huge systemic risk and failure both socially and economically.

The problem is that he just can't see it himself. He's still running all over the world trying to sell his plans to keep printing money and stimulate consumer spending. Merv the Gov went public today and openly disagreed with the "Brown Solution" going so far as to say that the UK could not afford another fiscal expansion. He's sided with Alistair Darling and the CBI against Brown who will be taking his ideas to the G20 next week. The problem he will have going into the London summit is that not only do his party, cabinet colleagues and man in the Bank of England disagree with him, but so do his contemporaries in Europe. Merkel and Sarkozy have both already sided together proposing alternative approaches to the problem. He is in danger not only of isolating himself but the UK along with him.

The only friend he seems to have is Obama, however it has to be remembered that Brown is also blaming this mess on the US and that the US is not siding with Brown rather than they have their own agenda that just happens to be the same at the moment. If things get hot, Obama will do what is going to make him sound like he is doing the best thing for America. The US has much bigger interests in much more powerful countries than the UK and if those interests are jeopardised then Obama will drop his old mate from the global war on terror quicker than you can say "WMD? What WMD?"

If Brown continues down the route he is going down, he will fail spectacularly...in fact he already has. The problem is that he is dragging the UK down with him and at the moment we're letting him do it. Time to call it a day I think and cut this loon free. Then perhaps we can contribute sensibly to the global solution that everyone seems to think we need in order that we can begin to grow again.

The Government is in open disagreement with the Bank of England

At Prime Minister’s Questions, William Hague repeatedly asked Harriet Harman whether Labour agreed with Mervyn King that Britain cannot afford another fiscal expansion.

William described the intervention from Mr. King, the Governor of the Bank of England, as “exceptional and extraordinary”, and stressed it was a “defining moment” in Labour’s handling of the recession.

He highlighted criticism of Labour’s plans for another fiscal stimulus from the CBI, the ITEM Club and the Chief Executive of the Audit Club, as well as from Mr. King.

And when Harriet Harman refused to confirm whether or not the Government agreed with the Governor of the Bank of England, William said:

“The nation will rightly conclude that this Government are in open disagreement with the Bank of England and are no longer in control either of the public finances or the policies of this country.”