In 1983, when Michael Foot's Labour Party tried to bring Britain back to the true path of socialism after what it believed was a brief and misguided detour into capitalist economics under Margaret Thatcher, its election manifesto was described as “the longest suicide note in history”. In the same spirit, the death throes of the Labour Government that started with Gordon Brown's arrival in No10 and reached its terminal phase in last week's Budget, could be called the longest assisted suicide in history.

Labour really is dying and Mr Brown could not have done the deed on his own. To destroy the successful Blair coalition he needed the acquiescence of the Cabinet, enthusiastic encouragement by Labour's traditional supporters and shrewd assistance from Conservative politicians, who have goaded him into suicidal behaviour, while keeping their own self-destructive tendencies in check.

This really is a self-inflicted demise. It was not inevitable, despite the depth of the economic crisis. Mr Brown made economic mistakes, but so do all politicians. And he may well prove to be right to claim that Britain will withstand the global crisis better than most other countries. And an economic crisis is rarely enough on its own to bring a government down, as shown by Mrs Thatcher and John Major in 1992. Around the world today plenty of governing parties, in Italy, France, Germany, Canada and Australia, are doing quite well despite the credit crunch.

Mr Brown's political misjudgments, not his economic decisions, lie at the heart of his personal tragedy. Consider the Budget. It contained some economic blunders, the most important of which was Alistair Darling's excessive emphasis on long-term economic and fiscal forecasts that are certain to be wrong.

Instead of piling on new taxes that threaten recovery, the Budget should merely have conceded, as President Obama's did, that tough decisions on taxes and spending may be needed in the future. But the unpredictability of the economic outlook and the danger of prolonging the recession make it foolish to decide today on the fiscal adjustments required.

Given that it takes more than a year for the full impact of monetary and fiscal policy to be felt, the Chancellor should have shown the patience he has demanded from the public and promised to refrain from any fiscal or monetary tightening until a recovery was clearly under way. This was the self-denying ordinance recommended by the OECD and the IMF to the G20 governments and was suggested to the other leaders at the London summit by none other than Mr Brown.

Why then did he get his Chancellor to do the opposite, imposing higher taxes on an economy still in freefall and announcing them in a manner designed to maximise damage to Britain's vital financial and business services? The answer is politics. Mr Brown hoped to wrongfoot David Cameron. If the Tory leader promised to repeal higher taxes, voters would see him as an ally of the bankers; if he refused, the Tory Right might rebel.

But the Tories spotted his “trap” a mile off, uniting in an attack on Labour's fiscal profligacy, that the tax increase seemed to confirm. To make it worse for Labour, Mr Cameron can still hint discreetly that taxes will be lowered when circumstances permit, thereby both winning over business donors who had supported Labour and indicating to voters that a Tory government would achieve a faster economic recovery.

In short, a booby trap Mr Brown was setting for the Tories blew up in his face - again. His record as Prime Minister is a sequence of self-inflicted mishaps, such as trying to steal Tory ideas on inheritance tax, backing a third runway at Heathrow to set the business community against the Tories and insisting on 42-day detention before charge and identity cards to show that he was tough on terrorism.

In such episodes Mr Brown seemed to be trying to manipulate public opinion - and each time he misjudged the public mood. The Budget revealed a deeper and more dangerous version of this - confusing transient changes in public opinion with lasting ideological shifts.

Mr Brown, and most Labour activists, seems convinced that the credit crunch will provoke a permanent revulsion against “the rich” and boost support for left-wing parties. The evidence suggests otherwise. Not only in Britain, but in Germany, France, Italy, Spain and Sweden, socialist parties are losing ground, whether in or out of government, while centre-right parties are gaining support. Only in the US has the Left benefited from the crisis, and there the movement is really towards the political centre from a dogmatic right-wing extreme.

The failure of the Left to gain from the crisis is not surprising. In postwar history, crises usually push politics to the right. When voters are worried about economics they tend to heed business opinion and trust politicians with business support. More fundamentally, they tend to realise that welfare and public spending must be financed by middle-income taxpayers, not just the rich - and when middle-class voters are under pressure, they prefer lower taxes to generous benefits for the poor.

It is actually in economic booms, not recessions, that left-wing parties with redistributive tax policies gain ground. Tony Blair understood this and positioned Labour as a party that put growth first and income redistribution a distant second. But old Labour never accepted this and it now appears that Mr Brown didn't either. As a result, Labour is reverting to pre-Blairite wishful thinking, dreaming that hardship will convince voters to support generous welfare and higher taxes.

Therefore, Labour strategists hope that even if the Tories win next year, it will prove a temporary aberration. A Tory victory would be a poisoned chalice. Labour would have history moving in its favour. It should regroup quickly and return to power on a tide of anti-capitalist ideology.

Unfortunately for Labour, this seems like wishful thinking. The British economy will probably return to decent growth soon after the election - and a recovery is almost certain during the next Parliament. In the Labour Party, meanwhile, the mutual hatred between the Left and the Blairites will become more intense in opposition than it ever was in government. This divergence will be magnified by the Left's belief that the heyday of capitalism is over and that public opinion will shift towards redistribution and a larger State.

If this is wrong, as it was in the 1980s, a radical realignment would become probable on the British Left. The remnants of new Labour would probably split off and join the Liberal Democrats who would become the dominant left-of-centre party, while Brownites and old Labour activists would form an explicitly socialist party. They could even reprint Michael Foot's suicide note.

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