Summer budget 2015: George Osborne's northern powerhouse 'looks like great northern powercut'

Harriet Harman accused George Osborne of abandoning his promise to build a "northern powerhouse" in the British economy after the chancellor delivered the first all-Tory budget in nearly two decades.

Before the budget, the Conservative chancellor paused planned investment in electrifying parts of the rail network in the north of England under his much-vaunted northern powerhouse plans to boost the region's economy.

"You can't build a productive economy on a political slogan," Harman, the acting Labour party leader, told Osborne, before claiming his "great northern powerhouse is starting to look like the great northern powercut".

But Harman also admitted that Labour would have sought welfare cuts if it was in government. She said the party would take Osborne's budget proposals seriously, though it would also "fiercely oppose policies that hit working people".

Osborne was delivering the first budget since his party won a majority at the 2015 election. It is the first Tory budget since the 1997 Major government.

He unveiled billions in welfare cuts to tax credits and housing benefit as part of his austerity programme to erase the deficit in public finances. Public sector pay rises will also be capped at 1%.

But Osborne also introduced a new compulsory National Living Wage, which will hit £9 an hour by 2020. And he committed to a decade of defence spending at the Nato target of 2% of GDP.

Harman said Osborne's budget was "more about political tactics designed by the chancellor to help him move next door" to Number 10 and into the prime minister David Cameron's job.