Pre-budget report: Broke, helpless Alistair Darling has run out of steam

• Alistair Darling poses for photographs with his pre-budget report outside the Treasury yesterday

He may have mouthed the words of a "Pre-Budget Report". But it was a Pre-Election Report.

And the text was all Gordon Brown: a manifesto bristling with hopelessly inadequate micro- measures for business and the big rhetoric designed to protect the government's interest and shore up Labour's core support.

As for the rest of us? In financial terms, we are about as "shored up" as a sandcastle in front of a tsunami.

There was nothing in this statement to give our economic recovery hopes a boost.

In the words of Lib Dem Treasury spokesman Vince Cable: "This is a good budget for bingo and boilers but not much else."

Corporation tax help for small business is welcome. But the big blaster needed to make that 3.5 per cent growth rate for 2011 at all credible – such as a slashing of corporation tax from 28 per cent to 20 per cent – was absent.

That is the order of magnitude needed to create jobs and soak up unemployment from the public sector. Instead, the government is sending us naked into the storm. It can fairly be said of this Pre-Budget Report (PBR) that it is one of the most appalling documents ever put before the British public in peacetime.

Never before has a UK government incurred so much borrowing and debt.

Never before has a Treasury document so marked the end of one era in British politics and the start of another.

Never before has a government looked so helpless in the face of what needs to be done – and what it has so flinched from doing.

Although the forecast for this year's budget deficit is raised only a little – from 175 billion to 178bn – the Everest of debt ahead is impossible to miss.

Total public sector net debt for 2010-11 is now reckoned at 986bn, up 9bn from the figure presented in the Budget earlier this year. By 2012-15, that debt figure will have ballooned to 1.5 trillion.

The figure is equivalent to 78 per cent of the entire worth of the UK. To put this in perspective, compare the government's utter absence of immediate action on this front with the Draconian measures announced by the Irish government yesterday, with cuts in public-sector pay, fresh tax increases and spending curbs in order to prevent the country's net debt from hitting 60 per cent of GDP.

Over-borrowed countries have been given an alarm call by the decision of rating agencies this week to downgrade Greek government debt. While the UK's AAA credit rating has looked safe up till now, lenders are now casting a cold eye on the mountains of government debt now coming on offer. In these febrile times, nothing can be taken for granted.

And that includes the UK government's debt projections. For while this PBR is a document of profound importance as a marker for the changed politics ahead, its debt projections should be treated with great caution.

This is because almost every single multi-year borrowing and debt projection set before parliament in Budget documents over the past ten years has proved to be a wild understatement of the actual turn-out.

The first estimate of our net debt position for 2010-11 was given in the 2004 PBR. The figure was 574bn. It was raised the following year to 589bn. It was raised in successive years so that, by the 2008 PBR, the forecast was 729bn. This was raised yet again in this year's Budget to 792bn. The latest estimate is now 799bn.

The first estimate of our net debt for 2013-14 was given in December last year at 1.1 trillion. The latest figure is 1.4tn. This persistent under-estimation of the debt explosion has happened every year, almost without exception.

And the curse of the Treasury's Dr Pangloss even works backwards. The latest figure for the net debt for the financial year just gone – the one ending in April this year – has now been revised up from 609bn in the Budget this year to 619bn.

But why should debt figures matter so much? This is why:

Next year, we will be paying 44.4bn in debt interest alone – never mind debt falling due for repayment.

That debt interest in 2010-11 will absorb the entire proceeds from capital gains tax, inheritance tax, stamp duty, tobacco duties, wine and spirits duties, beer and cider duties, betting and gaming duties, air passenger duty, the climate change levy, the aggregates levy and Customs and Excise levies – and still leave 1bn to find.

And this debt interest bill will rise sharply in future years, forcing further cuts in departmental spending limits as room has to be made for this cost.

Little wonder many now fear our only way out of the debt trap is to let inflation rise and wipe out the burden in real terms. But if financial markets sense that is the plan, the price of government stock will be driven down and the yield on debt servicing driven up to compensate the holder of debt for that risk.

So the real Budget is still to come. Yesterday's statement gave a glimpse of the pain ahead, with a further rise in both employer and employee National Insurance contributions and a 1 per cent ceiling on public sector pay rises – from 2011. Lord make me chaste – but not yet – and certainly not before the next election.

The sooner these PBRs are taken out of the hands of politicians and entrusted to an independent body, the better chance we have of at least knowing the true state of the mess we're in.

What we have got now is fantasy-land finance, a kleptomaniac's kidology.

But what is all too real is the hard truth of the belt-tightening ahead. Everyone knows it's coming, but politicians pretend not to hear. Truly, the era of debt-and-borrow politics has drawn to a farcical close.

PRE-BUDGET REPORT: MORE REACTION

• Chancellor 'ducking big decisions' as main measures delayed till after election

• Tax rises and pay caps but can it stop the rot?

• Windfall tax on bankers' bonuses labelled a drop in the ocean – but a blow to the City

• SNP claims spending delay will hit Scotland

• Gerri Peev: Blueprint for recovery looks more like a death certificate

• Sceptics claim failure to tackle public finance deficit outweighs plus points

• Analysis: Short-term political gains may not pay off in the long term

• Scotland on Sunday question of the week: Has the Chancellor ducked the big decisions with his Pre-Budget Report?

Measures at a glance

One-off 50 per cent levy on any banking bonus above 25,000 before April 5 2010, raising 550 million to get unemployed into work.

National Insurance contributions doubled to 1 per cent.

Plan to increase inheritance tax threshold to 350,000 scrapped for next year. Threshold will be frozen at 325,000 in 2010.

Thousands more workers to be brought into 40 per cent income tax band by a one-year freeze on the threshold of 43,000.

Temporary 2.5 per cent cut in VAT to end on January 1, with the sales tax returning to 17.5 per cent.

Basic state pension to rise by 2.5 per cent in April.

50p-a-month duty on landlines to pay for superfast broadband coverage by 2017.

State deficit to be halved over following four years to 82 billion in 2014/15.

Public sector pay bill to be cut by 100 million over three years.

Extra 2.5 billion for Afghanistan military mission next year.

Electric cars to be exempt from company car tax for five years.