The big story from yesterday is that Britain now has a new government - or at least a new chancellor. Who needs elections, if the Labour Party copies Tory policies within a week of them being announced? The reforms of inheritance tax and nondomicile status, the most important announcements, had not even been considered in the Treasury until a week ago.

What these sudden changes mean in practice is that policy pronouncements from the Tories must in future be given equal weight with proposals from Downing Street. In other words, Britain now has a credible alternative government - and instead of the November election which Gordon Brown abandoned, we now face a two-year election campaign.

Everyone knew that Alistair Darling’s presentation yesterday was designed to do double duty as the launch pad for a general election, but nobody suspected the extent to which politics had taken over from economics in the Treasury, as well as in Downing Street. He glossed over issues of unprecedented complexity, condensing into less than half the length of a normal Budget not only the economic forecasts and public borrowing targets normally delivered in the Treasury’s technical PreBudget Reports, but also the controversial political announcements on long-range plans for health, education, transport, defence, arts and other spending departments that should have been delivered in what was supposed to be the strategic cornerstone of the entire Brown era - the first so-called Comprehensive Spending Review since 1998.

By burying this mass of information in a single, brief parliamentary statement, the Treasury has reduced to farce its supposed commitment to strategic planning and created opportunities for political manipulation that few other democratic nations would tolerate.

A decade of experience has taught the public and the City to beware of instant judgments about Gordon Brown’s economic announcements. In recent Budgets and Autumn Statements, it has taken days of forensic sifting through Treasury and Revenue documents before the true picture on public finances, taxes and spending plans was revealed. But never has the gap between parliamentary presentation and serious economic analysis been as wide as yesterday afternoon.

Having sounded this health warning, we can nonetheless draw some important inferences from the facts and figures produced by the Treasury last night. First, it was clear why Mr Brown was so tempted by an early general election, since the short-term economic outlook for Britain now seems to be worse than at any time since Labour came to power in 1997 – and probably since 1992. The Treasury’s downward revision of its growth forecast, to between 2 and 2.5 per cent in 2008, is broadly consistent with the private sector consensus, but it is still dangerously optimistic.

Growth has fallen into the lower half of this range only twice since the early 1990s, in 2002 and 2005; also, economic forecasters typically get their numbers wrong when major structural trends are changing. And this summer’s financial crisis may well represent such a change - not so much because of its psychological effects on homeowners and mortgage lenders, which will be marginal, but because of the reductions in high-paid employment and bonuses in hedge funds and investment banks in the City of London.

It is perhaps significant that most of the recently revised economic forecasts have been at the bottom end of the consensus figures quoted in the Treasury papers. Moreover, the analysts closest to the financial sector and the City have slashed their growth forecast for next year radically: the Centre for Economics and Business Research is forecasting 1.4 per cent growth, HSBC 1.8 per cent. If these figures turn out to be right, then 2008 will be by far the weakest year for our economy since 1992.

If growth does slow to this sluggish rate, then the second problem revealed by yesterday’s statement - the Treasury’s persistent inability to meet its fiscal targets - will turn into a serious political headache, if not an outright economic crisis. The fact is that relentless growth of public spending has already played havoc with the Treasury’s efforts to control public borrowing. If the borrowing overshoots revealed yesterday are combined with an economic slowdown and a loss of revenue from financial profits and bonuses, the result will be very different from the Treasury’s reassuring fiscal forecasts.

Luckily for Britain, the prudent fiscal management of the early Labour years and the postERM period of the Major administration left government finances so strong that a few years of rising public borrowing is not a problem. But borrowing at 3 or 4 per cent of GDP cannot go on forever. Moreover, there must be political implications from repeatedly missing Gordon Brown’s self-imposed “fiscal rules”. These have now been bent and twisted beyond recognition and at some point the new Chancellor will have to invent new fiscal guidelines.

The temptation to abandon all fiscal discipline emerges from the third fundamental problem revealed yesterday: the spending plans, if taken literally, are so tight that any improvements in public services will depend on near-miracles of productivity and wage restraint. This is most obviously true for the Home Office, which is supposed to deal with crime within a budget falling in real terms. But even health and education will experience a halving of their recent rates of growth.

The Government’s response to complaints about underfunding is, of course, to promise “smart” services, reductions in bureaucracy and other productivity improvements. But how will these efficiencies suddenly be achieved in monolithic public services, which have resisted reform for years? The absence of any answer was the main lacuna in Mr Brown’s Bournemouth conference speech - and Mr Darling’s performance yesterday left us none the wiser. In reality, the implausibly tight spending plans will provoke confrontations between the Government and public sector trade unions - and to avoid such confrontations, there will be stealthy reductions in many public services.

This brings me to the last, and most worrying, problem; the dark, unmentionable secret which will haunt British politics for the next decade - the fact that the NHS has become an incubus, sucking the life out of all other public services, which have to be starved of funds to meet its demands. NHS spending has risen from 6.6 to 8.2 per cent of GDP in the past five years, accounting for two thirds of the increase in the share of public spending.

From now on, the public sector will shrink quite markedly in relation to GDP (if the Treasury figures are to be believed), but health spending will continue to grow - to 10 per cent of GDP by the end of the 2008-11 planning period and well beyond that in the rest of the decade. The logical conclusion of such projections is that all nonmedical public services, including education and law enforcement, will continue to deteriorate and tax burdens will eventually become unsustainable if British voters maintain as an article of faith that they must have a fully tax-financed health system, free at the point of use.

These complex issues were too important and controversial to be covered in a single parliamentary statement, especially one cobbled together at the last moment. Voters and financial markets will be justified in treating most of this Autumn Statement as a manifesto for a possible future Labour government, rather than a solid programme that Mr Brown will actually enact.

Britain now has two years to debate Mr Brown’s proposals in detail and weigh up with equal seriousness whatever genuine alternatives the Tories may offer to Labour’s approach. The 2007 election may have been cancelled, but the 2009 election campaign has now begun.

Times Recommends

• Bank charges hit us for being human
• Sorry, Father, thou still shalt not steal
• The shed where Santa’s failures go to die