After the Second World War, Prime Minister Attlee inherited a country on the verge of bankruptcy. The war had ravaged the nation’s finances and it wouldn’t be long before America decided they didn’t trust Britain to pay back the money we had borrowed.

Attlee, invoking measures proposed by the economist John Maynard Keynes, sought to secure employment through increasing the public sector. By 1951, 20 per cent of the British economy had been taken into public ownership.

On Friday, shares in Lloyds slumped 35 per cent after the announcement that its HBOS bride had lost £10bn last year.The shotgun wedding of the banks seems now to have been overly salacious; many senior government officials are now having wedding night nerves. Titters of HBOS’ nationalisation are spreading.

The Liberal Democrat spokesman, Vince Cable, spoke of his concerns that “we’re getting into nationalisation accidentally”. This is unlikely to be the case.

Labour has gone so far as to nationalise two high street banks already, along with pumping billions of taxpayers money into the investment banking sector. Add this to the VAT debacle, and a promise to guarantee any deposits up to £50,000 and a picture begins to emerge. It is an essentially political one.

As Gordon Brown wishes to categorise the Tories as a ‘do nothing party’, he positions himself as a ‘do everything PM’. Labour is drifting closer to its socialist roots as it contemplates taking yet another bank into public ownership. This is perhaps no bad thing.

Just as Keynes once suggested, only half-jokingly, that people could be paid to dig holes and them refill them, so Brown would rather compliment David Cameron than see another Briton go without work. Brown is using this crisis to drag his Labour party to the left of the one he helped create under Blair. Should Brown stick to his ideologies, an already burgeoning public sector could well swell further.

The next election will be focused on the economy, and the news will not be flattering for the incumbents. Brown is already laying the foundations for a newly socialist party, knowing full well he will be hammered over Britain’s finances.

Tomorrow Alistair Darling will announce his pre-budget report – hailed by many as the most important in a generation. It will certainly be the most significant of his career.

It’s not the best kept secret that Mr. Darling will move to temporarily cut VAT to 15% as part of the Government’s £25bn tax relief plan. We can expect radical action from Labour and all-round head shaking from the newly-nasty Tories.

There are calls for one-off tax credits for the poorest off, a reduction in corporation tax and greater stick type incentives for the long-term unemployed.

Apart from that, the content of the announcement is pretty much  any one’s guess. Here’s what won’t happen:

• Alistair Darling and Gordon Brown read out a joint statement sincerely apologising for the way they have destroyed the economy. “We got us into this mess with an unsustainable culture of easy debt and endless borrowing. But, trust us, more of the same is just what we need to fix it.” To reiterate his sincerity, Brown attaches a lie-detector machine to his temples, which immediately explodes.
• After stunned silence reverberates through the chamber, David Cameron leads the clapping which slowly turns into rapturous, adoring applause.
• Mr. Darling holds up his red briefcase for the cameras which falls open, exposing its contents as no more than an apple core and a Mr. Men book.
• Cameron and Brown agree to ‘forget our differences’ before embracing in compassionate man hug, sobbing.
• Mr. Darling criticises the EU directive keeping VAT at a minimum of 15%, calling EU commissioners “garlic-munching spoil sports”.
• Nick Clegg puts forward an authoritative and exhaustively researched financial rescue plan that will allow Britain to avoid recession and reduce taxes whilst increasing public spending and employment levels. The plan is universally acclaimed.
• George Osbourne sings the MPs out with a rendition of Chas and Dave’s “Ain’t No Pleasing You”.

David Cameron has risked derision by abandoning plans to match Labour spending until 2010. The Tories’ argument centres around a public spending framework rooted in financial responsibility.

Bloggers have been quick to draw blood, but if the Saviour of Capitalism can change his mind, why can’t Mr Cameron?

Cameron is now on more traditionally Conservative ground, in spite of a new found aversion to tax cutting. Unsurprisingly, this has received widespread support among Tories. But is there anything in it? How can all nations of the world (apparently) support uniform tax cuts and Her Majesty’s Opposition not?

The arguement that short-term tax cuts, coupled with increased public spending will eventually lead to equal tax rises – possibly when Mr Osbourne has wrestled the keys to the treasury from Mr Darling’s cold, tenacious fingers – is a sound one. Sort of.

A tax cut of, say £20bn now will not necessary lead to an increased treasury debt of £20bn. With more money in their pockets, people will spend more and potentially generate more jobs. Jobs mean tax so the Government could potentially end up more people paying tax (albeit a little less). Just the shot in the arm the economy needs.

If this is the case – and Labour are clearly hoping it is – then why haven’t this Government been one of low taxes since the start?

It’s amazing to see the two main parties posturing for position, and how they’ve changed tunes with the times.

Cameron knows his ‘it’s going to hurt, but eventually you’ll thank us’ will prove unpopular compared to internationalista Santa Brown. He’s banking on the next general election being in 2009 and, given how desperate Brown has been to get into Blair’s slippers, it’s unlikely to be any sooner.

By then the public may come round to Dave’s hastily scribbled way of thinking. Of course, if superGord saves the world, the Tories could end up ruing such vacillating.

People really are gullible. The Times has just broke the story that Labour have pulled back five points on the Tories, according to the latest Populus poll.

Brown is seen “by voters as best able to handle the recession.” Presumably they have been taken in by Brown’s self-casting as a new FDR, as a saviour of the global economy. He is not.

Labour’s proposals of tax cuts are likely to be followed by other political parties. They are a good idea; giving people back some of their hard-earned cash might encourage them to spend more or it.

But – and this is key – with Britian already carrying the greatest debt percentage of any developed country, neither the Conservatives or the Liberal Democrats propose to cut tax by increasing Government borrowing. Sound like a good idea?

Brown is playing the ‘I was there when we got into this mess, so I’ll be here to get us out’ card. It is a rather limp bluff. Brown has no experience of power during a recession, just experience of deregulating the Bank of England and, by extension, facilitating wild lending and unsustainable growth.

People will eventually see through Brown, sinister smile or not. While not the sole contributor to our financial woes, he was certainly implicit in the “age of recklessness”.

Shadow Chancellor George Osbourne, in today’s Financial Times, argues that were we increase public debt for short term tax relief, “Britain’s international credibility will be further imperiled, future generations will be burdened with even more debt and a recovery would be threatened by the prospect of large tax rises. We would be sowing the seeds of the next crisis.“

The argument of incumbency or precedent should not be an acceptable one. If it held any sway, Barack Obama would still be an unknown Illinois senator. Alistair Darling would still be in charge of our roads. And, to misquote Mr Cameron, “Gordon Brown would be Prime Minister forever.” Shiver.