Election 2010: Leaders scrap over economy and tax cuts

David Cameron appeared to have come out top in the last and most crucial of the TV leaders’ debates in which he accused Labour of failing to significantly improve the country's economy.

Early polls following the debate suggested Cameron comfortably ahead of his rivals, with ComRes placing the Tory leader on 35%, Nick Clegg on 33% and Gordon Brown trailing on 26%. YouGov for the Sun had Cameron on 41%, Clegg on 32% and Brown on 25%, and AngusReed had Cameron on 36%, Clegg on 31% and Brown on 23%.

Brown was quick to move on from his embarrassing gaffe earlier in the week in which he was picked up by a microphone describing a voter as a bigot following her questions about immigration.

"There is a lot to this job, and as you saw yesterday, I don't get all of it right. But I do know how to run the economy, in good times and in bad." he said in his opening statement.

"What David would do in an emergency budget in a few weeks' time is, for idealogical reasons, take £6bn out of the economy and put our recovery at risk. The time for a deficit reduction is when the recovery is assured."

Sticking with the economy, Clegg said Britain must rediscover its passion for innovation and manufacturing, "not just placing bets on the money markets".

He added: "We need to do things differently to build a new stronger and fairer economy. The way they got us into this mess is not the way out, so we need to be frank about the cuts that will be needed."

Cameron said the economy is stuck in a rut and argued change was needed to get it moving again. "First, we need to reward work and tackle welfare dependency," he said. "Second we have got to fix our banks. We have to tax them to get our money back, regulate them properly and get them lending again."

During one of the most heated exchanges of the evening the Prime Minister described Tory plans to cut inheritance tax for wealthy families while axing child tax benefit as "unfair and immoral".

Cameron said Brown had "absolutely nothing positive left to say" and accused him of offering "very desperate stuff from someone who's in a desperate state".

He went on to point out it was Brown who abolished the 10p tax rate and gave pensioners a 75p rise.

Asked whether politicians were ignoring voters' concerns about immigration, both Clegg and Cameron chose to avoid attacking Mr Brown directly over his gaffe.

They instead entered into another animated debate about the Lib Dem policy of "amnesty" for illegal immigrants who have been in the country for over 10 years. In retaliation Clegg argued the Conservative pledge to put a limit on immigration was unworkable as most immigrants would be from EU countries and therefore exempt from capping.