Did Cameron really have that much to celebrate?

If you believe the media and the polls, then the last debate had only one winner. Sean O'Grady, Economics Editor, begs to differ

Let's get real, to borrow a phrase. If you were one of those watching who hated Gordon Brown because of what he'd done to Gillian Duffy you would not suddenly warm to the curmudgeonly old sod because he made some good points in the discussion about national insurance contributions. By the same token, if you think Mr Brown did make the right calls on rescuing the economy, you'd have long discounted his social clumsiness.

True, you might have been surprised by Nick Clegg in the first debate, but then again the fact that people did not have perceived ideas about him meant an opportunity to form a first impression was bound to be dramatic, as indeed it was. Once formed, it has not altered much, and much the same goes for David Cameron and Mr Brown. The post-match opinion polls are heavily coloured by preconceptions.

So it is hard to assess the three leaders' performances objectively. We do have people metering – the electronic "worm" that crawls across the screen and measures how warm or hostile people feel towards what a leader is saying. But that has the obvious drawback that a "winner" is simply the person who came up with the best soundbites, usually researched from focus groups and duly fed back to the public through the television screen in an endless feedback loop. It doesn't actually mean they've got the best policies, or that their figures add up. Hitler, one recalls, seemed to have a knack for telling audiences what they wanted to hear: his worm would have looked quite sprightly.

Which leaves us with policy, and, unfashionable as it may be, there were many moments in the debate where Mr Cameron was much the weakest of the three, and often when Mr Brown pressed him. To reiterate, when Mr Brown did that he seemed negative and hostile, which doesn't go down well with voters; but Mr Cameron still failed to answer the challenges that Mr Brown laid down.

First, let's take that £6bn that Mr Brown said Mr Cameron wants to take out of the economy this year, to pay for reducing the "tax on jobs", the rise in employers' national insurance contributions, next year. Who's right? Well, the independent National Institute of Economic and Social Research was scathing about the Conservative plan when it turned its attention to it on Thursday. The "tax on jobs" is anything but, it points out, and the effect of raising it is much the same as a hike in employees' national insurance or income tax. That's because employers find ways to pass on the cost of a higher wage bill through smaller wage rises; in the short term employers might see their profits reduced because the wage bill goes up, which presumably is why so many bosses have objected. A tax on profits, in other words.

On the other hand, says the NIESR, a cut of £6bn in public spending this year would mean 30,000 public sector workers getting the sack – the very job losses that Mr Cameron says would destroy confidence. Plus, the economy will be a bit stronger next year than this, so a little more able to cope with a rise in employer NICs than a cut in public spending now. To be fair to Mr Cameron, his cut wouldn't be large enough to send the economy into a "double dip" recession, as Mr Brown claimed, as it would shave about 0.1 per cent to 0.2 per cent off this year's anaemic economic growth rate of 1 per cent. However, the Tory plan would weaken recovery. On the question of timing – cutting the deficit by more now or later – Mr Brown won.

On inheritance tax too, Mr Cameron was found wanting. Cutting it does indeed benefit a very small number of estates worth more than £2m, only 3,000 families. Politically, it plugs into the British obsession with property and "aspiration" but it is, as Mr Brown says, regressive, and hard to justify when the Conservatives say that their top priority is reducing the deficit. It's a matter of £3bn or so, so not that big a deal when we're borrowing £163bn thus year, but a useful contribution nonetheless.

Mr Brown also had the better of Mr Cameron on the dull but important issue of corporation tax. The Tories want to make the tax lower, and thus more internationally competitive, and more neutral, so it treats all enterprises equally, whatever they happen to be doing. However the way that Mr Cameron would cut corporation tax is by abolishing the investment allowances to offset it available now.

Fine, except that manufacturing – which Tories say they want to promote – is capital intensive and benefits most from these allowances, while banking – which the party says we became too reliant upon – would do better from a cut in the headline rate. Caught in Birmingham, of all places, Mr Cameron was wise not to spend too long trying to justify his policy when Mr Brown challenged him.

For the third time in as many debates, Nick Clegg also got away with his self-declared error of judgement over the euro. In the parallel universe where Charles Kennedy was Prime Minister and Mr Clegg in his Cabinet in 2001, the UK would have joined the eurozone.

Mr Clegg now says that that would have been a bit of a disaster, as one of the few things the UK economy has going for it now is its freedom to devalue sterling to win export trade and help rebalance the economy. Had we been in the eurozone the housing bubble would have been even more extreme, the boom more riotous, and the crash more ruinous. Greek-style ruinous. All this Mr Clegg admits, oddly. As things stand, many in his party still see the euro as an article of faith, and the Liberal Democrats are still committed to it.

For Mr Brown the escape was even more dramatic. Neither Mr Clegg nor Mr Cameron asked him why he let public sending run out of control after 2001, leaving us with the structural deficit we have today. By the end of the next parliament (assuming it goes to five years), all the increase in public spending achieved by Mr Brown as Chancellor and Prime Minister will have been wiped out by cuts.

The Liberal Democrat and Tory leaders also failed to put to Mr Brown the idea, voiced often enough in radio phone-ins and the like, that Mr Brown has had 13 years to make the UK economy competitive and put her public finances on a sound footing, and failed. Too often they allowed Mr Brown to use the global downturn as an alibi for his own mistakes.

Generally though, I have to say that the standard of economic debate in these TV shows made me depressed beyond tablets. None of them told us the truth about which public services will be cut, and which taxes will have to go up. Let's see if it improves the other side of polling day.

Voters' Panel

Margie Arts, 67, retired lollipop lady, Barrow in Furness

"Cameron didn't impress me. He and Gordon Brown were both talking guff. Nick Clegg was talking common sense. The bigot incident has made Brown more human. We've all had times where pensioners go on and on about something and you have to be polite, and when you get out of the room you say, 'Oh God!' "

Kay Wilkinson, 34, mother of two, Pendle

"I can't stand Cameron so I can't say he won, but he had more about him than Nick Clegg, who was less calm and collected."

Mumina Hassan, 22, student, Northampton South,

"Cameron had strong points in certain areas, but I didn't agree with his points about immigrants: I think he is too tough."

Interviews: Rob Hastings and Tom Brooks-Pollock