The politics of austerity have given way to the politics of recovery quicker than anyone expected last year.
The economy has picked up spectacularly with the Bank of England predicting 3.4 per cent growth this year.
Despite an enormous deficit – estimated at 5.6 per cent or £96bn this year which will not be paid off until 2018 – MPs have quickly turned their attention to giveaways instead of cuts.
The key Treasury debate ahead of tomorrow’s Budget has been who to cut taxes for – middle earners or the low paid?
On one side, the Liberal Democrats want to increase the income tax personal allowance further to £10,500 by April 2015, backed by senior Tories.
It is the Lib Dem’s most popular policy by a country mile but it has been partly funded by dragging more people into the 40p tax band with below-inflation rises to the threshold.
Around 1.4 million extra people have drifted into paying the 40p tax this parliament meaning 4.4 million individuals currently earn more than £41,450 and pay the rate, compared to just 1.35 million when it was introduced in 1988.
Middle earners have also faced years of falling wages in real terms and cuts to child benefit.
This shift has created a powerful coalition calling for some relief for middle earners by raising the 40p threshold to £45,000 or even as high as £50,000.
The campaign has the support of two former Tory Chancellors, the influential Free Enterprise Group of 40 Tory MPs, the Institute of Directors and Ukip who are all calling for the 40p tax band to be increased.
But the Chancellor looks set to resist the calls to change tack and instead back further rises to the personal allowance.
There are other tax cutting options other than raising the 40p threshold or the personal allowance. Thinktanks Resolution and Centre Forum have criticised further personal allowance rises as they do not help the poorest earning less than £10,000.
Backed by former Lib Dem Treasury spokesman Lord Matthew Oakeshott, the think tanks would rather see the national insurance personal allowance rise from its £5,668 base. The Tories are also reportedly considering an increase to the NI allowance in their manifesto.
But that’s for the next future. Tomorrow, the Treasury’s tax cuts are likely to be modest and focused on those earning between £10,000 and £40,000.
It is worth remembering George Osborne cut income tax for those earning more than £150,000 from 50p to 45p in March 2012.
With wages still falling in real terms and a powerful coalition circling Osborne, Labour leader Ed Miliband would be well advised to once again make himself champion of the “squeezed middle” tomorrow.
Samuel Dale is politics reporter at Money Marketing – you can follow him on Twitter here