Budget row dominates headlines

The prime minister has faced further Budget criticism, with a warning of "two parliaments of pain" as the country pays off government borrowing.

The Conservatives warned the country was facing a "secret tax bombshell" following the Institute for Fiscal Studies calculations of a £45bn black hole in public finances.

And the IFS, in its Budget analysis, predicted that public debt will be "high for a generation".

This shortfall would require tax rises of £1,430 per family or "massive" spending cuts.

Downing Street doubted the figures, questioning the way they had been calculated.

The prime minister's spokesman said: "It does seem to include efficiency savings that are being made, which is why we are able to have a lower projected growth in public sector current expenditure.

"Therefore it is not entirely clear why we would count an efficiency saving as a cost to a family."

The independent think-tank warned the squeeze on spending would see a repeat of the experiences of the mid-1980s.

And it added that if the budget squeeze were to continue to fall on spending up to 2017, total public spending would return to 2002 levels.

The IFS cast further doubt over the 50p tax rate, saying there was tremendous uncertainty over how much revenue it would generate.

It warned that the rate will in fact drive rich people away from the UK to spend their money elsewhere, with the reform potentially costing the government money.

Shadow chancellor George Osborne said the analysis had shown ministers had understated the scale of the downturn.

He said: "It shows what a dishonest Budget it was and how quickly it is unravelling."