Mr Brown, who resigned as prime minister after Labour's 2010 General Election defeat, was furious about this week's call for a further round of austerity from the Chancellor and accused him of squandering three years of vital growth.
"We must have growth with social justice," said Mr Brown, claiming Tories were attacking the unemployed for failing to get jobs which did not exist, the elderly for being old and the disabled for their disability.
Speaking at a campaign launch for his party's candidate Alex Rowley, the Kirkcaldy and Cowdenbeath MP urged the people of Fife and Scotland to "think carefully" before voting in September's referendum.
"We know that the future of Rosyth depends not only on having a Labour administration in Fife, but having us as part of the UK. A defence centre, a nuclear centre, a renewables centre for the future.
"Fife was shaped by the mining industry, which used to have 30,000 miners, and by the Rosyth naval base and dockyard where there used be 15,000 people working but now only 1000 people."
He added: "Employers will say: 'We will come to Scotland if you reduce the minimum wage, or we will go to England or Wales if they cut the minimum wage'.
"The SNP has already announced that they wish to cut corporation tax, that they wish to compete with Ireland on corporation tax to lower the revenues that they receive.
"We don't know what effect this will have on business but we do know that there will be less money available for pensions, public services, education and health."
The election is being held following the death of Labour MSP Helen Eadie, who died in November days after it emerged she was being treated for cancer.
Seven candidates are contesting the by-election, including the SNP's Natalie McGarry, a policy adviser working in the voluntary sector; local councillor Dave Dempsey, who is standing as the Conservative candidate; and IT worker Jade Holden, who is the Liberal Democrats' candidate.
Mr Rowley said: "I have said time and time again that there will be no increase in the council tax."