Shadow Chancellor Ed Balls has criticised George Osborne during a Commons debate by accusing him of having 'no plan for growth' and 'no plan B'.

Mr Balls said the Chancellor may be forced to downgrade his "very first growth forecast" of 2.3 per cent this year.

Mr Osborne retaliated by telling the former Labour leadership contender that he should know the economic recovery was "always going to be challenging and choppy".

Labour backbenchers cheered as Mr Balls made his debut in his new role after replacing Alan Johnson.

He asked the Chancellor: "With consumer confidence falling, with inflation rising, with no bank lending agreement, no plan for jobs, no plan for growth, no plan B - does he really expect us to believe he can meet this forecast for economic growth this year or will he have to stand here at the Budget in six weeks' time and downgrade his very first growth forecast?"

Mr Osborne replied, to cheers from Tories: "We have had to deal with his economic legacy and he is running away from his past.

"He is the City minister who knighted Fred Goodwin, he is the economic adviser whose fiscal policy has led to fiscal disaster, he is the leadership candidate who for reasons of political positioning denies the deficit.

"The truth is this - we have got a plan to clean up his mess. He has no plan at all."