Harriet Harman and David Cameron have angrily disputed the effect of the emergency Budget on pensioners and families during Prime Minister's Questions.

During lively exchanges Ms Harman repeatedly accused David Cameron of not being "straight" with the public about the impact of the Government's proposals.

Harman claims that the coalition's announcement that they will restore the earnings link gives pensioners "nothing extra" because no more money has been set aside to pay for it.

She insisted elderly people will be left worse off once the impact of the VAT rise is taken into consideration.

Mr Cameron fiercely rejected her charge, saying £1 billion was being put into pensions. The Prime Minister says pensions will be uprated in line with the retail price index, which he claims is likely to be higher than earnings next year, giving pensioners a rise.

Ms Harman also suggested that families on a joint income of £30,000 could lose their tax credits under the Government's emergency package.

The Tory leader sidestepped her question, saying: "What we are doing is making sure that the less well off families get the most money."