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Reaction to the statement

Shadow Chancellor Michael Howard said the Tories welcomed many of the things Mr Brown had announced.

"But praise from his political enemies is nothing new to him. After all, only last week the Prime Minister let it be known that the Chancellor was probably the best Chancellor in the world - the Carlsberg Chancellor.

"True to form the Chancellor returned the compliment. He said that Prime Minister was the best friend he had had in politics.

"The Prime Minister knows that with this Chancellor you have to read the small print. The Chancellor used the past tense - that phrase had something of 'good night' about it",joked Mr Howard.

He was making a joke of the comments by his former ministerial colleague, Ann Widdecombe, that Mr Howard had 'something of the night' about him.

On the mini-budget Mr Howard said there were serious concerns about the UK economy even before the Sept 11 US terror attack.

"The Chancellor referred to the need to improve public services. But we've heard all this before. Year after year we've had promises from this government," said Mr Howard.

"In 1997 they said there were 24 hours to save the NHS. In 1998 the Prime Minister said they were delivering on their promises. In 1999 the chancellor said this would be Labour's year of delivery.

"Every year they make these promises - every year they break them. Despite all the hype and hyperbole, services like health, education and transport have got worse over the last four years."

Liberal democrat Treasury spokesman Matthew Taylor said this was a complacent statement from a complacent chancellor.

"On the NHS an admission of failure. On pensions the biggest imposition of means-testing in history. There have been nearly 500,000 job losses in manufacturing since 1997," said Mr Taylor.

"Confronted by record waiting lists and just a day after the chairman of the labour party admitted parts of the NHS had got worse under Labour, Mr Brown must realise the Liberal Democrats were right and the Chancellor was wrong - the only way to tackle the problems of the NHS is increased taxes."