Mr Speaker, today, confronted with the biggest budget deficit in our peacetime history, he faced a choice.
Would he take the tough spending decisions before the General Election, or would he completely duck them? We were promised a Pre Budget Report and instead what we got was a Pre Election Report.
They have lost all the moral authority to govern today.
Instead, the full scale of the economic disaster that Labour has visited upon the country is clear to us all.
The biggest debt we have ever known.
Spending cut on almost everything.
Taxes up on anyone who earns more than £20,000 a year. Labour's new tax on jobs.
Higher interest rates to pay for higher borrowing.
Every family in the country is going to be forced to pay out for years for this Prime Minister's mistakes.
At the end of their period in office they have indeed adhered to the greatest of golden rules: never ever trust a Labour Government with your money again.
Everything they have told us on the economy collapses in the face of the truth.
They told us they would be "prudent" - and the figures produced just now show Labour quadrupling the national debt in office.
They told us Britain was "better prepared than other countries" - and now our budget deficit is higher than other comparable country anywhere in the world.
They specifically told us Britain would "lead the world out of recession" - and now the rest of the world leaves Britain behind as it recovers.
We are now the only G20 economy still in recession.
That Prime Minister used to stand at that Dispatch Box on days like this and tell us that he had rewritten the laws of economics, he'd abolished the trade cycle, he had "abolished boom and bust", - now the numbers we have just heard confirm the Prime Minister has inflicted upon us the longest and deepest recession in our modern history.
No one will ever believe a word they say on the economy again.
Faced with this catastrophe, the Chancellor had three tasks today.
First, to restore confidence in Treasury forecasts;
Second, to at last, we'd hoped, produce at last a credible plan to deal with Britain's record debts;
And finally to show the world that Britain is open for business again.
He failed on all three counts.
First, the forecasts.
Every time the Chancellor has come to this House, he has got them wrong.
Today was no different.
The GDP figures for this year show a contraction of 4.75%, he confirmed. That is not only more than a full percentage point worse than his Budget, it is almost four times worse than his forecast at this PBR a year ago.
And I noticed in his speech a little slight of hand. He gave the annual contraction figure for the UK, and the total contraction figure for every other county.
The total contraction figure for the UK is 5.9%, the worst since the 1930s.
And it would be difficult to imagine that this forecast for borrowing would be an underestimate. But so it turned out to be.
I've been told they've been having a row in Downing Street.
The Prime Minister wants him to get the forecasts wrong on purpose while the Chancellor prefers to be wrong by accident.
Either way Britain is borrowing £178 billion this year.
He is a figure he didn't give: £789 billion of additionally borrowing over the next six years.
And this is on the basis of heroic assumptions about future growth and a sneakily fiddling of the definition of the structural deficit buried in the actual report.
What it all amounts to is that he is doubling of the national debt to £1.4 trillion.
£23,000 for every child born today.
And yet without a hint or irony or contrition, he publishes today what is farcically called a Fiscal Responsibility Bill.
As if we needed a law to tell us that their irresponsibility has been criminal.
This is what one of the Prime Minister's own appointments to the Monetary Policy Committee has just said about their law:
"Fiscal responsibility acts are instruments of the fiscally irresponsible to con the public."
What he should have introduced was our plan for a proper, independent Office for Budget Responsibility - that will keep the Chancellor honest and ensure that never again can a government fail to fix the roof when the sun is shining.
So he has not restored confidence in Treasury forecasts.
His first task - failed.
The second task was to set out a credible plan to deal with the debt crisis.
Yesterday, another credit rating agency warned that the UK was at risk of a downgrade.
This morning even the Deputy Leader of the Labour Party admits that the "markets are getting more nervous than they were about government borrowing".
The Governor of the Bank of England says we must eliminate "a large part of the structural deficit over the lifetime of a parliament" - and I agree with the man in charge of monetary policy in this country.
Yet today the Chancellor is sticking with the same plan he set out at the Budget.
That is the plan that the Bank of England, the CBI, and the OECD have all told him is not credible.
The whole object of policy going forward in this recovery should be to keep the fiscal reins tight so that interest rates can stay as low as possible for as long as possible and that is not what his recipe provides today.
But as the debts have become bigger, so the government's response gets smaller.
What he had to say to this House today on spending is just not credible.
He promises more efficiency savings.
Now, coming from the people who just spent £4 billion on an NHS computer system, that rings a little hollow.
As for the waste advisers who wrote those reports that the Chancellor's published today - they've lived up to their names by deciding that they are not going to waste any more time on him. They're working with us.
Then there are the proposals today on bankers.
We said two months ago, we warned him they should stop big cash bonuses and I said in my conference speech we should look at the tax system.
Let's be clear. They are going to pay out a load of bankers' bonuses they shouldn't have been paying in the first place, then put a one year windfall tax on them and declare it a triumph.
The real test of this new tax will be whether it curbs bank bonuses instead of bank lending.
Let's hope it is more effective than those binding lending agreements which we once heard so much about.
They say they will use the money on youth unemployment - because instead of abolishing it, which is what the Right Hon Gentleman promised, the Prime Minister has led young unemployment to a record high.
But what we need is a real, lasting plan to Get Britain Working and deal not just with the millions or more people who have lost their job under Labour but the millions more who've never had a job under Labour.
On spending, the Chancellor is prepared to tell us what he will spend money on, but stays almost totally silent on where the real axe will fall.
He is achieving the previously impossible scientific trick of ring-fencing a black hole.
He said, with understatement, that this is not the time for a comprehensive spending review. This is from a Chancellor who said he was acting from a position of strength.
Why is it not the time for a comprehensive spending review?
They have all the figures.
They have all the access to the information they need.
They had a spending review just before the 2001 election.
They had a spending review just before the 2005 election.
Now suddenly the spending review has to wait until after the 2010 election.
That spending review is the massive missing piece of this Pre Budget Report.
Lavish detail on the few things they say they are protecting - almost nothing on the many things they are planning to cut.
They are not being honest with the British people about the real price of their incompetence.
This is nothing to do about protecting frontline services - this has got everything to do with protecting themselves.
So what we see today is not a credible plan on the debt.
So he failed his second task.
The Chancellor's final task was to set out a real plan for growth.
And what does he propose to do?
He proposes a higher tax on jobs.
That is his answer to Britain's unemployment problems.
Higher costs for struggling businesses.
More money taken from families.
Yet another thing we could have avoided if this government had taken the hard decisions in the good years.
And let me just say this about some of the tax measures he announced in this Pre Budget Report.
The message to aspiring families from these tax changes is pretty clear.
If you want to get on in life;
If you want to own your own home;
If you want to save for a pension;
or leave something to your children;
then the Labour Party is not for you anymore.
All that work they did to drag their Party onto the centre ground of British politics, all the efforts they made to persuade the
country that they were for enterprise and aspiration.
All that is gone.
Instead they have erected a sign over our country that says "closed to enterprise and wealth creation".
All for the sake of narrow political dividing lines.
Instead of telling the country that we are all in this together, Labour now pretend they can solve our problems by setting one part of the country against another.
And at the next election it will be few who support this approach and the many who reject it.
So instead of a plan for growth and jobs, the Chancellor's plan is higher taxes, higher taxes on jobs, higher interest rates, turning his back on aspiration and enterprise.
His third and final task - failed.
No credible plan.
Why is it that every Labour Government there has ever been has taken this country to the brink of bankruptcy?
Each one in turn seems to ignore the most basic rule of finance: if you keep on spending more than you earn, sooner or later you run out of money.
How difficult can it be to remember this simple point?
The country faces a choice:
There's Labour's route, set out for us today.
Higher debts leading to higher taxes and higher interest rates.
The recovery choked off.
Britain reduced again to being the Sick Man of Europe.
Or they can choose our route.
Face up to the problem.
Set out to eliminate a large part of the deficit in the parliament for which we are all accountable.
Expect everyone to share in the burden, but protect the lowest paid.
Keep interest rates lower for longer.
Send the message out loud and clear that Britain is open for business.
And transform the economy they built on debt into one where we save and invest.
That is not going to happen under this government.
The Prime Minister, Mr Speaker, always called himself the nation's bank manager - and so he has been.
He bet the nation's finances on a never ending property bubble and a City bonanza.
And now, like every other failed Master of the Universe, he's coming to the taxpayer and asking to be bailed out.
But he should remember this: that most bailouts start with a change at the top.