With the dust beginning to settle after the pre-budget report – and not in a pattern that the government will like (see below) – it is interesting to note the question James Forsyth poses over on the Spectator's CoffeeHouse blog: what would a New Labour budget have looked like?

Needless to say, this is based on the assumption that yesterday's PBR did in fact signal the death of New Labour, as this Times leader brilliantly argues. It's not a bad assumption. It struck me as a resolutely Old Labour budget – the kind Dennis Healey could have been proud of. No more prudence, no more golden rules, no more acknowledgement that wealth creation is a necessary condition for 'social justice', rather than it's sworn enemy. Let's just spend and borrow to our heart's content, because someone else will be picking up the bill.

Anyway, James thinks he know what New Labour would have done:

New Labour might have lifted people out of income tax altogether — helping the poor but also sending out a low-tax message...

And they would have done this, he conjectures, by raising the personal allowance. Well, that's just what we suggested the Chancellor do in our brieifing paper Why Alistair Darling should raise the personal allowance. The paper called for a personal allowance of £12,000 for every UK taxpayer – a move which would take 7 million people out of tax altogether and make the average worker £100 per month better off.

James continues:

I suspect that this would have worked better both economically and politically.

Indeed it would. Are you listening, Mr Darling?