Last week's election fiasco marked the end of the beginning for Gordon Brown’s Government. This week’s Autumn Statement was the beginning of the end.

Last week, the Prime Minister was in personal trouble, his carefully crafted image of decisiveness, straightforwardness and strategic thinking was in tatters and his closest lieutenants were looking like fools.

All this was bad, but not irreparable. The deceptively flattering bounce in the polls was over, but the new Prime Minister had two years to get on with the serious business of government and lay out a programme for what he could reasonably expect to be his second term in office. This long process of communication and implementing the new Prime Minister’s long-term strategy was supposed to begin with Tuesday’s Autumn Statement. Instead, what started last week as a personality issue has turned into a crisis of confidence in the entire new Labour project, an erosion of its ideological basis and a fragmentation of the coalition that built it.

These are large claims, perhaps exaggerated by the infectious myopia that often distorts our vision in the Westminster village. There will be many more unexpected events between now and the election, so nobody can seriously claim to predict who will win in 2009 or 2010.

What can be asserted with confidence, however, is that the pendulum of British politics has suddenly changed direction and the interesting questions now are all about the speed of motion, not about the clear reality that the centre of gravity is moving back to the Right.

To put it another way, the new Labour coalition, which so recently imagined itself as the “natural party of government” for 21st-century Britain, looks increasingly like a temporary interlude in the long era of Conservative ideological dominance that began with the victory of Margaret Thatcher in 1979 and still has decades to run. Politics, economics and ideology all now point in this same direction.

Starting with politics, the new élan of the Tories and the demoralisation on the Labour benches was almost painfully evident at Prime Minister’s Question Time yesterday in the confrontation between a relaxed and eloquent Mr Cameron and a defensive, almost frightened-looking Mr Brown. Such personal atmospherics may change – and Mr Brown may even gain a sympathy vote, as John Major briefly did among women, if the Tories continue to bait him as cruelly as they did yesterday. What will not change is the newfound status of the Tories as a plausible alternative government and a source of new ideas for British politics in the years ahead.

Even tactically, Labour will suffer from apeing the Tory idea of inheritance tax reform. People who really care about inheritance tax will still vote Tory, since a simple allowance of £1 million is much more attractive than £700,000, hedged about with complicated conditions.

Meanwhile, Labour activists and voters who believe in principle that inheritance should be heavily taxed will despair of the Brown Government and turn to the Lib Dems or nationalists instead.

Economic conditions will aggravate the political risks to Labour. The danger lies partly in the weakening of economic growth. But this slowdown would not have damaged the Government’s economic credibility on its own. Voters understand that boom conditions do not last for ever and the economy next year is unlikely to be much worse than in 2005, when Tony Blair was reelected with a comfortable margin. The bigger problem is that an economic slowdown will play havoc with the Treasury’s figures on public borrowing – especially if the tax attack on foreign workers aggravates a sharp decline in City jobs and profits, as it probably will.

If this occurs, then the Treasury will be forced to abandon the fiscal rules and targets invented ten years ago by Mr Brown. Indeed, the process of abandoning these rules began with the Treasury statement, in which the Chancellor did not bother to read out the public borrowing figures, knowing that nobody would have believed them in any case. With the credibility of the Bank of England also in question, economic policy will be almost rudderless.

And that, in turn, will embolden opposition to the Government from both the Left and Right. Unions and traditional Labour voters will demand ever larger breaches of public spending targets, which are being overshot anyway. Meanwhile, George Osborne will be able to argue, with a lot of justice, that government costings of proposed Tory tax cuts are just as unreliable as the projections of the Treasury’s own fiscal plans.

A period of intellectual anarchy can be expected between now and the next general election. Since the Government has been so cavalier with numbers in its own economic and fiscal planning, Treasury criticisms of the Tory policies will be dismissed as propaganda. This economic free-for-all for all should allow the Tories, if they play their cards wisely, to shift the locus of debate even farther on to their home ground. They will be able to promise tax cuts without worrying too much about their financing, since the public will ignore lectures on fiscal prudence from Labour politicians who had broken all their own rules. Meanwhile, the appeal of public spending will be waning, as the NHS absorbs ever larger sums of public money, while doctors, nurses and teachers protest at pay cuts and hospitals and colleges close down.

The upshot is that the burden of proof in British politics is shifting. That taxes and public spending must rise for ever can no longer be taken for granted. Political parties who want lower tax – and by implication smaller government – no longer seem out of tune with the times. And this ideological shift means the beginning of the end for Labour government.

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