There is a tipping point in the affairs of nations which, unnoticed, can lead to untold miseries. Britain is certainly at that point, and may well be past it. Alastair Campbell’s announcement on Friday that he is deserting the Downing Street ship, one of Westminster’s worst-kept secrets, can be taken as a signal that spinning a success story for this government is going to get much harder. Mr Campbell criticises the media for being obsessed with the tittle-tattle of government, not the big picture. There is some truth in that. So let’s do him the final courtesy of following his logic. It seems only yesterday that Britain was on the verge of becoming an international economic powerhouse. The trade unions had been tamed by Margaret Thatcher. The long-dormant entrepreneurial spirit had revived. The hopelessly antiquated and anti-capitalist Labour party had been captured by Tony Blair who promised to combine the party’s historic search for social justice with a new reliance on markets. The chancellor was singing the praises of work, competition, incentives. Mr Campbell spread the good news.

For a time it seemed that all the pieces were in place to vault Britain’s economy into the top rank. The Bank of England proved a skilful manager of monetary policy and slew the dragon of inflation that had frightened investors. The government kept its distance from the woebegone euro and Mr Campbell, his antennae sensitive towards public opinion, did not encourage his master to change course. Downing Street kept the sullen but not mutinous trade unions at arm’s length. And the iron chancellor held down spending and contained his lust for new sources of tax revenues. As a consequence the economy grew, jobs were created. That was then, but this is now. Just as a person can get scalded without noticing it by increasing the temperature in his bath one degree at a time, so a nation’s economy can be badly burnt by a series of measures, no one of which seems to do much damage when initiated. It is not easy to see precisely when the tipping point occurs, but occur it will as the cumulative effect of blows to the economy’s health are felt.

The British economy is at that point. Promises that taxes would not rise have proved not to be bankable. The overall tax burden has steadily risen, as Sir Christopher Gent points out opposite. And the form of the increases has shifted from merely unpleasant to threatening growth. The April rise in National Insurance contributions has both reduced incentives to work by lowering disposable incomes, and made it more costly for employers to create jobs. And there is worse in the offing. The Treasury is preparing to raise the tax on foreigners resident but not domiciled in Britain. These people, whether they be City investment bankers, bosses of multinational industries or Greek shipowners, constitute the world’s most geographically mobile work force. They can and will vote with their feet, depriving Britain of wealth for no gain in revenues.

The prime minister, less interested in the economic impact of a tax on jobs than in making good his televised promise to bury the public services in new money, defends the rise in taxes as being necessary to bring Britain’s public services up to international standards. Few would deny that transport and other services have been underfunded in recent years. But few would defend pouring new money down the same rat hole into which old funds have disappeared. The rift at the heart of government is obvious. The prime minister claims he is on the side of major reform, and would like to increase parental and patient choice. But he runs for cover when his chancellor insists that the Treasury retain control of the funding of foundation hospitals.

Overseas investors’ fears flow not only from watching developments at No 11, but from what they see going on at No 10. No, not the Hutton inquiry hearings, certainly not whether the prime minister’s information chief comes or goes. The country is at the tipping point. And Mr Campbell isn’t there any longer to deny it.