The last time Britain faced a year like this, the political boot was on the other foot. At the start of 1991 the Tories had to defend the economy’s painful descent from boom to bust. The late John Smith, Labour’s shadow chancellor, castigated them for presiding over an unbalanced economy excessively dependent on financial services and for allowing our manufacturing base to shrink. Those who forget history’s lessons are condemned to repeat them.

One lesson from 1991 is that recessions eventually end. This one feels different and more disturbing as a product of a sickening downward lurch in the credit cycle. The consequences of the banks’ mismanagement are being felt on every high street and in offices and factories throughout the land. Latest evidence from the Bank of England, showing that availability of lending tightened in the past three months and will do so even more over the coming quarter, confirms that the economy is still being crunched by lack of credit.

If nothing else makes this situation stand out it is that the Bank, having cut interest rates to their lowest level since 1951, appears set to reduce them this week to the lowest since 1694. This is terrible news for savers and far from unalloyed good news for borrowers, given that loans are so hard to get.

The urgent task of Alistair Darling, therefore, is to break this lending logjam. Left to themselves, banks will do nothing. The herd instinct that led them to lend too much during the good times now persuades them into what Lord Myners, a Treasury minister, describes as “reckless caution”. Bankers really do only lend you an umbrella when it is not raining.

There are some easy things for Mr Darling to do. Northern Rock, the first of the nationalised banks, is running down its mortgage book at a time when the housing market is desperate for funding. If it became a lender, if only temporarily, it would help. More fundamentally, governments, including Britain’s, have to step in where the markets have failed.

When the dust settles, banks will still need long-term funding from wholesale markets. Such funding remains largely frozen at present because of lack of confidence. Official guarantees for such funding, entered into on commercial terms – a variation of the plan proposed to the chancellor by Sir James Crosby, the financier - could unfreeze these markets.

The risk is that without tackling the root cause of the problem - lack of credit - the government will be forced into a series of piecemeal rescues for the car industry or anybody else going cap in hand to Downing Street. If we had a shipbuilding industry of any size, no doubt it would also be in the queue. But down that route lies the reckless state intervention of the past. Restoring the flow of lending is the priority. Ministers should resist the desire to be Lady Bountiful to all and sundry.

The other lesson of last time is that the politics of recession cannot be taken for granted. The opposition 18 years ago was in many ways in a stronger position than now. Margaret Thatcher had just been ditched, taking many of her party supporters with her, and the government was locked into the strait-jacket of ERM (exchange-rate mechanism) membership. It was far easier then for the opposition to pin the blame for a “home-grown” recession on the government.

Yet the Tories under John Major won the recession election of April 1992 because, however bad the government was, voters had even less faith in the opposition. As Britain enters a very tough year, David Cameron’s task is to give them that faith.