Sean O'Grady: He has one last chance to preserve his legacy

Alistair Darling has a claim to be the most unlucky Chancellor of the Exchequer since the Second World War. He moved into Number 11 just before the credit crunch and will leave office, in all likelihood, before the slump has properly ended.

Gordon Brown is Mr Darling's other misfortune. The good fairy endowed Mr Darling with many gifts – brains, a certain diffident charm, memorable facial hair; but she forgot to add good fortune. At any rate, he'll have some priceless raw material for his memoirs (provisional title: "It wasn't my fault").

If I were Mr Darling I would ensure my political epitaph doesn't read more like a charge sheet: the man who left Britain with the worst public finances in the advanced world; the lowest growth in any major economy; the highest unemployment in decades.

He has one last Budget. If he does manage to bring off a package that will restore the Government's reputation for sound economic management, as well as Labour's poll lead, he will have engineered the biggest comeback since Lazarus.

It is tempting to consider what Mr Darling might have done if he had not had that lunatic in No 10 spoiling his plans. Some things would have been the same, especially those ideas that germinated in the mind of Mervyn King, Governor of the Bank of England, such as recapitalising the banks and the £200bn programme of quantitative easing. We would also have had the cut in VAT in the 2008 pre-Budget report. But the one substantial difference is that we would now be getting ready for an increase in VAT this spring to 19 or 20 per cent. We know this because the Treasury didn't quite manage to erase all references to the putative new rate from the more obscure PBR documentation; it had obviously been blocked by No 10 in some last-minute panic even as the documents were going to the printers.

That scheduled rise to, say, 19 per cent would have signalled that this is a serious government that takes the budget deficit seriously. It would have disarmed the Tory and stabilised the markets. As it is, we are left with the prospect of a hung parliament, the last thing the gilts market wants to see and Labour is still trailing. Just remember – it is not Alistair's fault.