MICHAEL SETTLE and ROBBIE DINWOODIE

Gordon Brown's draft Queen's Speech was overshadowed yesterday by a grim warning from the Governor of the Bank of England, Mervyn King that "the nice decade" was over and tough times lie ahead for ordinary families.

The Prime Minister made clear that helping family finances was his immediate priority as he unveiled proposals for 18 Bills, of which 14 will impact on Scotland.

But as the Prime Minister addressed MPs, Mr King was delivering his bleakest forecast since Labour came to power, warning householders that the squeeze on their budgets would get worse. "The nice decade is behind us," he declared.

Inflation, already above target at 3%, was forecast to remain so for the next two years with a peak of 3.7% this year. Growth was predicted to slow to 1% this year, well below the Treasury's 2% forecast. Mr King said it was "extremely difficult" to give projections due to the uncertainty over the rising price of fuel and food but he insisted the UK economy was travelling "along a bumpy road".

Yet, he played down the prospect of a recession, saying: "At some point, we might get the odd quarter or two of negative growth but recession is not the central projection at all."

In the Commons, following his £2.7bn compensation package in the wake of the abolition of the 10p tax rate, Mr Brown hoped his legislative proposals would help him regain the political initiative with a pledge to help first-time buyers, a saving scheme for the low-paid and more flexible working rights for parents. But David Cameron claimed most of the programme was reheated with many policies stolen from the Conservatives.

The Tory leader insisted it proved Mr Brown's administration had "run out of steam" and was "yet another attempt to save the Prime Minister's skin" ahead of next Thursday's Crewe and Nantwich by-election.

Today, the battle for the political high ground continues with the PM giving his regular Downing Street press briefing.

At Holyrood, a system allowing Scots to monitor how the country is performing in health, education and the economy was revealed by Alex Salmond.

The launch of Scotland Performs on May 27 will allow citizens to go to a website and check how public services measure up.

The First Minister said: "This will allow our people to see at all times whether Scotland's social partnership is bringing real improvements to our quality of life."

Mr Salmond announced a further improvement to the Freedom of Information regime modelled on practice in Sweden and starting with the environment portfolio, an annual £2m Saltire Innovation Fund to encourage inventiveness in businesses and universities and £600,000 to upgrade Stirling into a Scottish University of Sporting Excellence.

These were the only new announcements in a statement to Holyrood yesterday which was about looking back on the achievements of the SNP's first year in government.

There was a furious reaction from Labour. Wendy Alexander said: "This isn't just lightweight but positively flyweight". Mr Salmond mocked her somersaults on referendum policy as "more Ronnie Corbett than Olga Korbut".

LibDem leader Nicol Stephen said: "The thing that people remember most about the first year of this SNP government is broken promises."