Say what you like about Alistair Darling but his pre-budget reports are must-see events. A year ago he tried to put the ducks in place for the election that never was with eye-catching announcements, some stolen from the Tories. How long ago that seems.

This time the run-up to the PBR has provoked intense debate about economic policy and elevated tomorrow’s statement to something extraordinarily important, economically and politically.

On one side of the policy divide you have Gordon Brown, flush with something approaching international adulation, not entirely justified, because of Britain’s banking rescue.

Last weekend’s G20 meeting in Washington gave him what he wanted. Not an agreement on a co-ordinated global package of tax cuts and increases in public spending but an acceptance that fiscal activism, where appropriate, made sense.

Brown was keen on this outcome, because it gave him political cover and because fiscal activism is more effective if many countries do it, reducing the danger that measures adopted in Britain would simply benefit other countries’ exporters.

Then we have the Treasury. A few weeks ago, even in the context of this autumn’s financial crisis and banking rescue, the word from officials was that monetary policy — interest rate cuts — should carry the weight of getting the economy out of recession. Treasury officials know they will be left with the job of clearing up afterwards and Darling did not want to go down in history as the man who presided over mind-boggling levels of borrowing.

Last week’s figures, showing £37 billion of such borrowing in the first seven months of this fiscal year suggest he would have been hard pressed to come up with a 2008-9 number much below £65 billion- £70 billion, even without additional measures this week. The numbers for 2009-10 were scarier, even before the stimulus.

Oil revenues, one source of comfort, have joined the downward trend, along with the corporate and personal tax take. Treasury officials knew they were looking at the first three-figure borrowing total in history — as in £100 billion-plus.

But words have been said and compromises reached. Tomorrow it will be hard to put a cigarette paper between Brown and Darling.

The big difference is between Labour and the Tories. In one respect, David Cameron has made a political error in recent days — he has sowed confusion. Few people have a clear idea of what the party’s policy is at the moment. I hope I have.

There are two elements. The recession-fighting element was “funded” by tax changes, such as a National Insurance holiday for firms taking on new workers from among the unemployed and a two-year council-tax freeze. But, crucially, if you believe the party’s costings, there would be no net giveaway.

The second element is Cameron’s new policy of not matching Labour spending commitments from 2010-11 onwards. This, a post-recession policy, anticipates what is likely to be a downward revision to medium-term spending projections by Darling (though starting later than 2010). It also makes the sensible point that there are ways of reining back the budget deficit in future other than pushing up taxes.

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