It is difficult to think of a more perfect testament to New ­Labour's intellectual shallows. On the eve of the most deadly serious budget in decades, ­Gordon Brown posts a YouTube video in which he announces he has scheduled some ­inquiry- ­pre-empting debate about MPs' ­expenses. It might as well have been captioned "I can haz bathplug?".

There are those who have judged that the next day's introduction of a 50% tax rate marked the end of New Labour. But for many students of the movement, that video seemed part of an absolute continuum with the past, combining an excruciating attempt to manipulate the news agenda with a helpful reminder of the petty chiselling of the Blair-Brown years. Think of it as expense fiddling while Rome burns.

MPs' expenses are a cross-party blight, of course. But when historians come to assess this edifying period for our democracy, they may well remark upon what a pity it was that certain members who were so fastidious about their personal outgoings were so ­profligate and laissez-faire with the ­public purse. Olympic overspends, a couple of wars – they waved through the lot while perusing the John Lewis ­electricals catalogue.

Doubtless historians will also note how pathetically in thrall the administration was to the very people out of whom it has taken such an ill-conceived bite this week. The cabal of very senior ministers and unelected advisers, to which we were obliged to refer as "the government", contrived to be both desperately impressed by the rich, and hopelessly out of its depth when dealing with them. One could never help but be reminded of Basil Fawlty in A Touch of Class, the Fawlty Towers pilot episode, in which Basil devotes himself to the most obsequious fawning before a ­conman calling himself Lord Melbury. Enormous cash advances, meticulous service to the exclusion of all other guests – there is simply nothing Basil can't do for his lordship, and the discovery that he has been made a mug of sends him predictably round the bend.

And so with our serially fawning government, which might be lashing out now, but whose forelock-tugging inferiority complex has been a defining characteristic. It wasn't just our special give-and-take relationship with George Bush's government (we gave, they took). Rather, it runs like a brown thread through the years since 1997. It was there in Peter Mandelson's famous ­declaration that New Labour was "intensely relaxed about people ­becoming filthy rich" – a styling meant to radiate progressive sophistication but which came off sounding like a fifth-former trying to look worldly.

It was there when Labour accepted a donation of a mere £100,000 from Richard Desmond – just days after it had waved through his £125m purchase of Express Newspapers. "I gave a cheque for £100,000 and they spent £113,000 or £114,000 on ­advertising," Desmond crowed later. "So I made money on the deal."

This morally bankrupt deference was there at every turn, from the piddling sum the party took from gazillionaire Lakshmi Mittal before sealing a £300m Romanian steel deal for him, to the fire-sale discounts at which one appeared able to land a peerage. New Labour's attempt to come across as market-savvy had all the mockney authenticity of a Guy Ritchie movie. They didn't ­understand their own market worth; they were hardly likely to start ­regulating those they clearly regarded as their betters.

Think of the Blairs, and their endless freebie holidays with everyone from Robin Gibb to Silvio Berlusconi. There go Tony and Cherie, you'd think, ­grinning out of the holiday photos like a pair of competition winners.

New Labour just looked like … well, small-time crooks is the ­expression, though of course there isn't the ­remotest suggestion that anyone did anything illegal.

As has become painfully clear, the gravest error was to assume that Brown was somehow divorced from this tendency, as opposed to echoing it in his own furtive way with his borrowing habit. And in the end, it's the smallness of these people that you can't get away from – the knowledge that Darling will be much more comfortable next week defending his use of second-home allowances than he will his budget.

A rather less comfortable public now feel that the chancellor's inability to even say the word "cuts" has moved way past being an insult to their intelligence. Any fool can see that savage slashing must lie ahead, and describing it as "efficiency savings" is a bit like describing Stalingrad as an argument in a car park. One pettish little tax hike isn't really going to cover it, and we can only leave the last word on the monumental inconsistency to Sybil Fawlty. "I have had it up to here with you. You never get it right. You're either crawling all over them, licking their boots, or spitting poison at them like some ­Benzedrine puff adder …"