The Pre-Budget Report delivered today will be as much a matter of parliamentary theatre as economic policy. Gordon Brown will be obliged to acknowledge that his forecast for growth in 2005 will prove unduly optimistic, an outcome that he will put down to the surge in the price of oil, and his opponents will insist is due to his mismanagement of the economy.

There will be heated debate as to whether or not there is a “black hole” in the public finances and what it might mean for levels of taxation and borrowing. Mr Brown, once an Iron Chancellor, will face the charge of having accumulated rust and of living off budgetary plastic.

None of this will matter much if the economy performs more impressively in the next two years. Few of Mr Brown’s difficulties cannot be dealt with by a renewed period of economic expansion. He will, in truth, probably be less concerned in this regard now than he might have been a few months ago. Consumer spending has not collapsed. Some of the most apocalyptic predictions as to what the price of oil might be at Christmas will not come to pass and property prices have stabilised, not slumped. There is, however, no room for complacency.

The best way of understanding the British and the world economy is, perhaps ironically, to ignore the analysis set out last week by the OECD. That assessment implied that continental Europe is on the verge of becoming a centre for growth, while the United States and Australia were cast as accidents waiting to happen, facing inevitable retribution for the assertive growth experienced in the first half of this decade. Britain, it was hinted, still closer to the Anglo-Saxon norm than Europe, would share in the slowdown.

Economics is not, though, a matter of “what goes up, must come down” or vice versa. The reality is that, unless leading continental European nations embrace reform, their supposed booms will be sad pops. And if the UK economy begins to resemble that European norm, it will continue to fail to fulfil its potential and be too reliant on consumers and their mounting debts. What the country now requires is a fresh burst of expansion driven by job-generating private corporate investment. Instead, companies, large and small, are frustrated by regulation and concerned that they will bear any “black hole” burden.

A creative Mr Brown would, for example, shore up the housing market by reducing the amount of stamp duty on more expensive homes, which would not have too disruptive an influence on the prices faced by first-time buyers. He might look again at the corporation tax regime. He can create a little breathing space for the private sector by pursuing public sector productivity (or the lack of it). The figures revealed last week on the staggering cost of the collection department of the Child Support Agency are an extreme illustration of an endemic culture of state inefficiency.

It is the microeconomic end that is the more important. Mr Brown is fond of extolling the virtues of enterprise as an abstract concept while appearing indifferent to the challenges faced by actual businesses. He needs to ignore the hullabaloo about past predictions on growth or black holes and show that he understands how companies and markets work, and how best to remove the constraints on them. The country would benefit, and so would Gordon Brown.