End of Thatcher's tax incentives

There were three big numbers announced in the pre-Budget report.

The biggest and most startling is that more than £500bn is being added to the national debt between now and 2015.

And the amounts that the government will be borrowing over the next two to three years will be unprecedented for peacetime.

But here's the thing.

If it weren't for substantial rises in National Insurance from 2011 onwards, those debt figures would be even greater.

Increases in employees' and employers' national insurance raise about £5bn every year.

And, funnily enough, £5bn a year is also what the Treasury hopes to save every year from 2010 in so-called "value for money savings" in National Insurance.

There was also a small number that caught the eye, which was that the Treasury expects the recession to be less severe than many independent forecasters.

And the Treasury also expects a sharpish economic recovery from the end of 2009.

Again, there are economists who fear the Treasury is guilty of optimism.

But investors apparently liked what they heard: the rise in the FTSE100 today is the biggest ever (though some of that is due to the bailout of Citigroup, which has very little to do with G Brown and A Darling).

Here's the big simple point.

This pre-Budget report symbolises a massive structural change in the British economy.

Quite apart from the massive rise in public-sector debt, there is also a big change in the structure of tax incentives.

These are the first seriously redistributive tax changes since the 1970s.

Or to put it another way, from 2011/12 the top 2% of earners will pay more tax.

In a way, this Labour government has ditched the cornerstone of Thatcherism, which is that those on highest earnings will create wealth for the benefit of all of us if they're allowed to keep as much as possible of their respective incomes.

More than a decade after the 1997 landslide, some will say that Labour has gone back to its socialist roots.

Tonight, the British economy has taken on a Scandinavian, left-wing tinge.