They can't give it away. So bad is the economic situation that the Government will have to admit next week that it cannot stimulate the economy by fast-tracking great capital projects.

So complex are the systems now, so unwieldy the planning process and so untrusted the Government, that the proposals and partners do not exist to build our way out of the downturn. Many billions of pounds are already stuck in the system, unspent. The £43 billion Building Schools for the Future programme, for instance, that aims to rebuild 3,500 schools in 15 years, managed in its first three years to rebuild... 13.

So ministers have turned to tax cuts, aimed at the poorer, to keep Britain spending. At a time when we are in deep trouble because of stupid levels of personal and public debt - the true level of the latter amounting to £76,000 for each household by John Major's reckoning - the Government plans to increase debt farther and to encourage people who can least afford it to spend more. It's a reckless and immoral approach and the failure of the Conservative Party to make political capital out of it has been astonishing.

Yesterday David Cameron began to fight back. He ran through the phrases belted out by Gordon Brown over the past decade, such as, “you cannot spend your way out of recession”, or “to make unfunded promises, to play fast and loose with stability (indeed to play politics with stability) is... something I will never do and the British people will not accept”.

In a good, clear speech the Tory leader set out the attack line that will determine the outcome of the next election: that in this economic climate you have to be realistic about limiting public spending if taxpayers are not to be hit with soaring bills.

It will strike a chord. I cannot be the only person bridling at the thought of funding a Christmas bonanza for those already receiving large amounts of tax credits (many of those claims already a fraud on the taxpayer, as everyone outside the Whitehall bubble knows).

All around the country people are tightening their belts, scrapping plans for holidays, cutting back on excess spending, imposing strict budgetary limits on Christmas. All around the country people are preparing for unemployment and perhaps the loss of their homes. If they do keep their jobs, these same people will be the ones eventually asked to pay for the big bung that the Government appears to be planning next week: £15 billion or £30 billion of handouts specifically to encourage those who could not otherwise afford it, to spend money - redistribution from you and me to them and FlatscreenTelliesRUs. That's another thousand or two to add to the household tax bill and it probably won't even work.

There is no mystery about Mr Brown's new-found confidence, the spring in his step: the Prime Minister has found his feet. He always was far more Labour than new Labour, far keener on redistribution, less persuaded of the need for reforms that now seem irrelevant in the light of the larger crisis.

Since he took office, the Blairite public service agenda has withered. Those trying to reform schools and hospitals speak of a lack of drive and enthusiasm for change from No10, and this was before the credit crisis really hit. Academies are being pulled back into the State's embrace, forced to work more closely with local authorities in areas ranging from extended schools to attendance records and “quality asssurance”. Hospital closures have been put on hold. Even the bankrupt post offices were miraculously saved last week. Well, why not? All the banks have been.

The only area where Blairite reforms are driving energetically ahead is in welfare, where from next Monday, lone parents will have to be available for work for 16 hours a week once their youngest child is 12, instead of 16. In two years' time, it will be when the youngest is 7.

Campaigners are protesting that this is unfair. “Some mothers think that they should be able to see their children through the transition to secondary school,” one protested to me. Tough. Plenty of working parents already lack that luxury; lone parents should be at work, or actively seeking it. The assumption of eternal entitlement reveals a lot about people who have become used to living off the state. National reserves of sympathy and understanding for them will dry up farther as the next year wears on.

Mr Brown didn't have much of a story to tell about his premiership, but the global financial crisis has given the Prime Minister his own play to star in: Gordon, Saviour of the Universe. Blairites fear that Mr Brown is playing a short-term political game, and nothing else; charging through each day, no pause, no discussion, no strategy.

They worry that he has become carried away by his image of himself as a world leader. The much vaunted “broad and concerted international macroeconomic policy response in fiscal policy” agreed at the G20, ie, Mr Brown's permission to dish out tax cuts, was in fact 21 words in a statement of 3,600 - and those 21 words included the warnings “as appropriate” and if “conducive to fiscal sustainability”.

Thanks to the recent Tory slump, the bluff and the bravado seems to be working. The pollster MORI now has the Conservatives down to a three-point lead. Push really, really hard and you can even get some Labour insiders to consider an election next year, if the poll numbers are there, if party support for Cameron collapses over the winter, etc.

It's all quite similar to the Prime Minister's brief period of popularity last summer. Then, as now, national threats (foot-and-mouth, terrorist attacks, flooding) enabled the Prime Minister to define himself. And we all remember what happened after that.

In these uncertain times, it isn't only the economy that is terribly vulnerable to boom and bust.

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