Politicians and commentators looking for a reason to proclaim the death of New Labour have been given their ammunition.

The decision in the Pre-Budget Report to raise income tax for the higher paid has already been portrayed, rather simplistically, as the long-predicted return of Old Labour.

Some of his most fervent admirers would claim that New Labour's demise came when Tony Blair left office in 2007.

But the circumstances in which Mr Blair and Gordon Brown promised no increases in income tax in 1997 are utterly different from today's. Then, they were trying to shake off the Old Labour tag by promising not to put up income taxes to show they were the party of aspiration, and not about to soak the rich. They also promised to match the Tory spending plans of that time, to prove they would not be spendthrift. They needed to reassure Middle England, and it worked.

The reason Mr Brown has given notice that this pledge will not apply after the next election is economic necessity. He has to show the markets that he has a plan to get the public finances back on track, and that eventually means higher taxes for all and lower public spending in the future. The message from Mr Brown and Alistair Darling in the run-up to this Pre-Budget Report has been that times are extremely tough and that the pain must be shared.

Indeed, by the time everyone has digested the full tax implications of today's announcements, it may well be that they will conclude that a decision not to have upped charges on the very high earners would have looked perverse.

It is not that the move will raise anything more than a tiny proportion of the sums needed to make the borrowing figures look more respectable. But fairness - along with opportunity - was one of founding principles of New Labour.

Yes, this decision is important and symbolic. But it is hardly a return to the mad, bad days of the 1970s when there was a tax rate of 98 per cent on unearned income. Mr Brown and Mr Darling have calculated that a rate of 45 per cent should not ruffle too many feathers - and may indeed prove popular.

Many Labour MPs, not all of them of a Old Left persuasion, feel that it has been allowed to survive for too long. They believe that Mr Brown might have used the tax lever more during his time as Chancellor. A National Insurance rise to pay for health expansion was his only significant increase in taxes on income during his decade at the Treasury.

Now the taboo has been broken. But is it really the end of the project that brought Mr Blair, Mr Brown and Peter Mandelson together in the 1980s as the vehicle for Labour's return to power? The last of that threesome is now back in the Cabinet and has resumed his role as a close adviser to the Prime Minister. It can only be assumed that the arch Blairite has gone along with it.

The end of new Labour? No. But whether the Government can survive the announcement of this and other tax rises so far in advance is the big, unaswerable question of the day.

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