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After Peter Mandelson's wry description of "a bit of a week", he went on to deny that the prime minister had lost his authority.

However, Gordon Brown shows every sign of having lost the respect, the fear and habit of loyalty from his party which are the foundations of prime ministerial authority.

Yesterday, they delivered an unprecedented victory for an opposition motion, even after a direct appeal from the prime minister and concessions from the home secretary.

On Monday, they forced him to abandon the key plank of his proposal to reform MPs' expenses - the daily allowance in place of the much-criticised second homes allowance.

What's more, the head of the independent inquiry into expenses, Sir Christopher Kelly, refused a prime ministerial request to speed up his work and refused to be bound by Mr Brown's ideas; in the Commons yesterday, MPs laughed derisively as a jet-lagged prime minister moved to leave the chamber after question time, apparently forgetting that he had a statement to deliver.

What's more, another foreign leader - the Polish prime minister - embarrassed Gordon Brown on a visit, as had the Czech president before him. Donald Tusk pointed to his own country's fiscal rectitude, making the contrast with Britain all too obvious.

And, as Peter Mandelson said, it is only Thursday - and today the Commons must decide whether to back the rest of the Brown expenses plan or to leave reform entirely to that enquiry.

Authority, unlike virginity, can be regained. After all, Gordon Brown did just that last year - in part by appointing Peter Mandelson to the cabinet. However, as Lady Bracknell might have said to lose it once may be regarded as a misfortune; to lose it twice begins to look like carelessness.

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THE TRAIN TO MANCHESTER: News reaches me en route to Old Trafford of .

It is proof, if any were needed, that away from the economy the prime minister is consistently misjudging issues.

His handling of MPs' expenses and the Gurkhas - issues that are far from being the major questions of our age but which generate huge public emotion - suggest if nothing else that he is being badly advised.

Ed Balls and Peter Mandelson are both shrewd political strategists but are simply too busy to give day-to-day tactical advice.

Damian McBride was valuable to the PM before his ignominious exit from Downing Street. However, taking the political mood on this sort of issue was not his strength.

Alastair Campbell is now a regular visitor to No 10 but, undeniably talented though he is, Gordon Brown needs full-time not part-time advice.

It won't be long, I predict, before Labour MPs demand that "someone gets a grip". The question is who?

Incidentally, today's vote is a significant victory for Nick Clegg who, as his predecessor Paddy Ashdown did many years ago with the case of passports for the Hong Kong Chinese, found his voice speaking up for Britain's moral obligations.

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AUSCHWITZ: Today in Poland, Gordon and Sarah Brown made a journey that very few returned from - a journey that ended in death for more than a million Jews, gypsies and political prisoners. A journey which the prime minister pledged would not be forgotten when he visited the Auschwitz-Birkenau death camp run with chilling efficiency by the Nazis.

Mr Brown promised that the British government would donate to an international fund being created by the Polish prime minister to preserve this site, as both a warning from history and a declaration of intent that it should never happen again.

Some claim that the holocaust never happened, or did not happen on the scale written about in the history books. The prime minister, though, was shown the hair of women gassed by the Nazis (which was then sold to textile manufacturers to make soldiers' uniforms) and the glasses which belonged to victims - each someone's son or daughter; each a record of an individual atrocity.

Tomorrow, 200 schoolchildren from Yorkshire will follow in the prime minister's footsteps, their trip organised by a charity, the , to which the government gives financial support.

Its aim is to send children from every British school here - to learn, and to pledge not to repeat the mistakes of the past.

After a visit to the gas chambers that claimed so many, Gordon Brown wrote in the visitors' book: "As we remember the worst of our past, we must each commit ourselves to serve the best of our future." He is planning to create some form of memorial to those British Schindlers who gave their lives trying to preserve the lives of others who were murdered by the Nazis.

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WARSAW: "Completely and utterly ridiculous". That was how a sleep-deprived to suggestions that his handling of had not been a total triumph.

Remember that first of all, . Then he said that it was a matter for an enquiry, after the next election. Next, he said that the enquiry should be quicker, before going on to pre-empt it with which was and therefore not open to questioning either by MPs or by the media.

Finally, last night, in a letter carefully released after a news conference in Islamabad and once he was protected from questioning on a flight to Warsaw.

And this morning, he said that the government would make fresh proposals by the summer, even though , had indicated that he won't be able to report by then.

Having said all of this, the prime minister didn't create the expenses mess and he is not solely responsible for sorting it out. All MPs share that responsibility - one which the Commons has ducked for a very long time.

What is completely ridiculous is to suggest that reform will be easy or is obvious. The issues that need to be resolved include: should MPs be allowed to use their allowance to pay a mortgage? If not, what about those who've already got them? Should they be allowed to rent or buy accommodation big enough for their families? If not, what do they do with them?

If a nightly allowance is introduced, what counts at as being at work? Attending a select committee? Having meetings at home or in Westminster? Visits abroad? Work in your constituency? Should MPs be allowed to own a property but still claim for living in another?

These are just some of the many issues that have still to be resolved. Of course, all this will be completely forgotten once the receipts from MPs' expense claims under the old rules are published in July. Had the Commons agreed to publish some information about their claims, rather than having fought Freedom of Information requests all the way in the courts, this would have been avoided.

Thus MPs find themselves the subject of widespread anger and suspicion and allegations that they are all "on the take". That is completely ridiculous - but they only have themselves to blame.

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ISLAMABAD: Talking about greater co-operation in combating terrorism is, it seems, easier than actually doing it.

The has been marred by a row about the recent arrest and subsequent release of Pakistani students. At the time, Gordon Brown claimed that the police had moved to foil "a major terrorist plot".

That is not how it's seen here. Pakistan's president did not go ahead with an expected news conference with Mr Brown, who had to make do instead with his prime ministerial counterpart. He also had to face an angry question. Why, the questioner wanted to know, did the British government intend to deport students when there was no evidence against them? This, it was suggested, was a violation of their civil rights. The questioner went on to say that they had been apprehended without evidence and that the British authorities had acted in haste and tarnished the name of Pakistan.

Gordon Brown struggled for an answer. The prime minister of Pakistan was clearer. His two sons were students in Britain, as was the president's daughter: just three of the 40,000 Pakistanis given student visas in the past four years.

All this is trivial, of course, compared with what President Zardari describes as a fight, a battle for the country's very survival against the Taleban and al-Qaeda. It is perhaps evidence, though, of how old sensitivities about relations with the old colonial power can mar co-operation even in the face of so great a threat.

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KABUL: "A crucible of terrorism". That is how the . It is a sign that he's following President Obama's lead in treating both countries as part of the same problem.

Today's visit to the region comes two days before Mr Brown will present to Parliament a new strategy for both Afghanistan and Pakistan. This morning, he met with military and political leaders in Helmand province before heading for talks with President Karzai in the Afghan capital, Kabul.

He believes that the big increase in troop numbers - particularly Americans - should be accompanied by the same strategy that succeeded in Iraq, namely: training a growing Afghan army and handing over control, province by province, to local leaders.

Of course, all of this will be in vain if the Taleban is simply able to cross the border into neighbouring Pakistan, a country which is now struggling to control its advance. Seven and a half years after the victory over the Taleban was declared, the prime minister's message here is that the fight is on - not in one country now, but in two.

Update 13:36: There are posters on the streets of the Afghan capital marking 28 April, the date that resistance troops entered the city in 1992.

At the news conference involving Gordon Brown and President Hamid Karzai, one questioner suggested that this was an ironic time to be boasting that more troops were coming to Afghanistan.

That, though, is precisely what is happening and all the signs are evident in Camp Bastian, the British base in the south of Afghanistan. A new runway is being built; a new air traffic control tower is already there and this base, for so long British, will soon have an American twang. There are currently 3,000 US marines there. It will soon be 10,000 - outnumbering the 8,000 British forces on the camp.

President Obama and Gordon Brown are committing resources here in the hope that an Iraq-style "surge" and an agreement to give control of provinces to local people will make the difference. After seven and a half years, there will be plenty of people who doubt whether this strategy will be any more successful than the last.

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The age of abundance is over. Welcome to the age of austerity.

For years politicians have argued about how to spend the proceeds of growth. For years to come they will have to argue about what should be cut.

They are, however, very wary of how the public will react.

Thus, the chancellor simply refused to use the word "cuts" when I interviewed him this morning (see below). This despite the fact that he used the word "cut" very liberally to describe less severe Tory plans made at the last election. He persists in implying that "efficiency savings" will be enough to produce the tightest squeeze on spending since the war. It won't.

Even now projects to rebuild further education colleges, schools and hospitals have been cancelled as capital expenditure has been chopped. What's more the whole of the public sector is bracing itself for a squeeze the like of which few have experienced before.

The government promises that schools and hospitals will not be affected. What about old people's homes, social services, prisons, colleges not to mention transport schemes, defence projects, the police and all the other costs? They may not fit neatly into the false distinction which is often made between spending on nurses and teachers ("good") and spending on Whitehall bureaucrats ("bad") but if they are cut people will really notice.

None of this is meant to imply that cuts are or aren't a good thing. I simply point out that the public are not being told what's in store.

The opposition parties have also been mightily reluctant to spell out what they might cut. This week the Lib Dems hinted that Trident might be for the chop along with the target of sending 50% of young people to university and tax credits for those on above average incomes. The Tories refuse to go beyond their old favourites - scrapping the ID card scheme and regional assemblies.

The think tank Reform came up with this week.

Who'll be the first politician to offer their own proposals?

Update 1607: You can see below the full version of my interview today with the chancellor; I began by asking him about the levels of borrowing.

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Few Budgets can claim to be truly historic. This one was. Not for the policies the chancellor unveiled but for the grim statistics he had to produce.

They confirmed that Britain is in the sharpest recession, has the highest borrowing and is about to experience the biggest public spending squeeze since the war.

Alistair Darling did not try to hide this. It isn't his style and, besides, it wouldn't have been possible. Instead, he told a story of the British economy being hit by a global shock; of a government that had chosen to spend and borrow more to stimulate growth; and of a willingness to ask the richest to pay more for the cost of what had gone wrong.

Gordon Brown used to be accused of taxing by stealth. Alistair Darling announced that he was breaking Labour's manifesto pledge not to raise the top rate of tax with a flourish - he is confident that the public is now ready to see the rich pay more.

The Treasury these days prefers stealth spending cuts. Nowhere did the chancellor explain the consequences of what is to come - a period of public austerity which will dominate politics for years to come.

All this was overlaid with a large dollop of optimism that the economy would start to grow again around the turn of the year and, what's more, grow mighty fast.

If the Treasury's predictions are wrong - as many suspect they are - the next Budget will replace this one in the history books.

Even if the optimism proves right, politicians will have to live with the fall out of this crisis for many years to come.

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Remember Tony Blair signing an election poster pledging that neither the basic nor the top rate of tax would go up under Labour?

Remember him saying that he didn't go into politics to stop David Beckham becoming a millionaire?

Remember Peter Mandelson saying that he was "intensely relaxed about people getting filthy rich"?

Those days are over.

Stealth tax rises are out. Overt tax hikes on the rich are in.

Why?

• In the name of fairness.
• To cheer Labour's supporters.
• To wrong-foot their opponents.
• To distract the media.
• Oh, and to raise money (although the Institute of Fiscal Studies has questioned whether increasing the top tax rate will raise much).

Their hope is that tomorrow's headlines will be dominated by questions about Labour's breach of their manifesto pledge and that the Tories will be asked for months to come whether they will reverse that tax rise or not.

What they know is that opinion polls show that higher taxes on the rich are now popular in the way they once were not.

What they also know is that David Cameron and George Osborne will come under pressure from the Tory press and Tory bloggers to promise to reverse this measure.

What they also know is that that is a more comfortable place to be politically than answering questions about why the chancellor's just confirmed the deepest recession, the fastest rise in unemployment and the biggest rise in borrowing since the war.

UPDATE, 14:01: A scan of the Treasury's Red Book of Budget stats suggests that that headline-grabbing rise in the top rate of tax will actually raise less than increased fuel duty (up 2p a litre in September) and the squeeze on public spending.

As I wrote earlier, stealth spending cuts have replaced stealth tax rises as the principal tool of the Treasury.

UPDATE, 14:06: For those who like the figures, the new top rate of income tax will raise an estimated £1,130m next year and the pension claw-back a mere £100m, whereas the fuel duty increase will raise £1,250m.

UPDATE, 16:25: Those nice people from the Treasury have called to point out important footnotes to the table of statistics which I quoted.

These - they tell me - show that eventually the rise in the top rate of income tax and the clawing back of tax relief on pension contributions will raise more than fuel duty.

On pensions they estimate that £3.1bn will be raised by 2012-3. Why the delay? Because, they tell me, of the lag caused by the self-assessment of tax.

In addition, if you take into account the chancellor's previous announcement raising the top rate of tax to 45%, the total amount raised by higher income tax in 2012-13 is estimated to be £2.4bn.

In the same year the withdrawl of personal allowances (announced in the PBR) would, they hope, raise a significant £1.5bn.

Their message, in summary, is that these tax changes are not merely symbolic or political - they will raise real money - eventually.

Of course, there will be no similar lag before people feel the pain at the fuel or beer pump.

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Alistair Darling is clearly determined to use his Budget speech to tell the country a story about why the economy is in the mess it's in and about the help that the government has already given. That's why he took nine minutes at the top of his speech before revealing any forecasts or making any policy announcements.

He is also determined to look optimistic about the future - predicting a return to growth "towards the end of the year". If he's right and the first quarter of resumed economic growth comes at the beginning of 2010, the figure would be unveiled just days before a general election.

UPDATE, 13:06: The new 50% top tax rate for those earning over £150,000 is designed to put the Tories on the spot - do they back it or pledge to reverse it? Since it will be introduced before the next election, they will have to say.

If they attempt to swerve this political trap they will face criticism from some in their own party and in the Tory press who will demand that they protect "our people".

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This Budget will turn early New Labour politics on its head, a leading Brownite tells me.

What he means by that is that unlike Brown Budgets there'll be no more "stealth taxes". The aim will be to put up in lights tax rises on the rich - the clawback of tax relief on pensions, for example - and to challenge the Tories on whether they would prefer to help "the few" rather than "the many".

This may not be a modern version of Lloyd George's but it will put a focus on fairness.

Where the stealth will come in is in spending cuts. The chancellor will attempt to draw a distinction between "investing in growth" now and what he dubs "savage cuts" proposed by the Tories. This will conveniently ignore the fact that the spending plans he's already unveiled involve what Labour called "cuts" when they were proposed by Michael Howard at the last election.

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Any chancellor hopes that their Budget will be remembered for the measures they announce.

Alistair Darling is all too aware that today's Budget will feature in the history books not because of the policies he unveils but because of the statistics he's obliged to produce - statistics that will confirm that Britain has experienced the deepest recession and the highest level of borrowing since the war.

What will be dubbed "a budget for jobs" will come on the day when a record rise in unemployment is widely predicted. The chancellor will target help on the under-25s, promising those unemployed for over a year either training or work.

To retain economic credibility Mr Darling will announce not just a further squeeze in public spending in future years, but also further future tax rises.

Tax relief on the pension contributions of those on the highest incomes will be clawed back - a move sure to be criticised as penalising those who've saved and to be defended as asking those who can most afford it to make a bigger contribution. (My colleagae Robert Peston recently outlined the arguments for and against this approach.)

Even with lower spending and higher taxes, the chancellor will have to tell the country that he is postponing the date on which he aims to balance the books.

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Thus the prime minister has finally responded to the slow-burning scandal of MPs' expenses - a scandal those close to him fear could taint his government just as one word - "sleaze" - tainted John Major's.

At first, Gordon Brown insisted that the question of how to reform MPs' expenses was a matter for Parliament not for him or the government.

Indeed, when proposals very similar to those he's outlined today were defeated in the Commons, he missed the vote and many of his colleagues backed the status quo.

Later, he called for an enquiry to report after the election.

Then, under pressure, he brought forward the timetable but rejected calls for him and other party leaders to lead the way to reform.

The anger generated by the home secretary's claim for the cost of an adult movie watched by her husband seems finally to have convinced Mr Brown that - fairly or not - he was getting the blame for a system that the public regards with anger and contempt.

Proposing reform and getting it agreed is, of course, a very different matter and will require many, many MPs - and not just the prime minister himself - to perform a U-turn.

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When is a cut not a cut? When it's an efficiency saving, of course.

Politicians of all parties like to tell us that they have come up with ways to save billions cutting Whitehall waste and bureaucracy but not - dearie me, no - by cutting spending on what they call front-line services.

Tomorrow, the Treasury will publish reports that claim that more than a further ten billion pounds can be saved in Whitehall by cutting the cost of computer technology, so-called back office operations and by selling off government owned property and assets.

There are a number of problems with this "cuts that don't hurt" approach.

Public spending cannot neatly be divided into pounds spent worthily on schools and hospitals and those spent wastefully on paper clips and management consultants. There is a lot of money and a lot of people's jobs that exist between those two extremes.

In the past, the National Audit Office has cast doubts on claimed government efficiency savings.

What's more, the collapse in Britain's public finances dwarfs what can be raised in this way. Who says so? Step forward Sir Peter Gershon - he, in case you've forgotten, was the last man to be appointed to cut Whitehall's costs.

For now, though, few politicians want to spell out what exactly government should stop spending money on - even if it is worthy and not wasteful.

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The holidays are over. Hooray! Phew. I can't wait to get back to work.

That's the mood among government ministers as MPs return to Westminster today. The Easter parliamentary break has left them feeling not rested and restored but demoralised and tarnished.

I spent the past two weeks not just out of the country but away from virtually all sources of news. I left Britain the day after Gordon Brown's G20 "triumph" - words of praise from presidents and prime ministers were still ringing in his ears - and I returned to a series of polls confirming .

Odd though it is to say, will come as a relief for government despite the fact that it will confirm the scale of the recession, the biggest rise in borrowing in peace time and, perhaps, the fastest rise in unemployment. It will mark a return to the people's priorities rather than Westminster's sordid dealings.

Since there is no money to be spent, it will be more of a political occasion than an economic one.

The Tories want it to be when the country focuses on how badly things have gone wrong.

Labour want it to define the political choice for the future. We already know the script - "'real help now' versus 'do nothing Tories'"; "investment versus cuts"; and "helping the many not the few" ...et cetera. What we don't yet know is how far the chancellor will go to highlight those choices. My hunch is: pretty far, so expect him to be tempted by: anything that focuses the debate on whether to tax the rich more; how far to give tax credits to the poor; pledges to increase spending on schools and hospitals ...et cetera.

It's not only the two big parties who are positioning themselves ahead of the general election. Later this morning, the Liberal Democrat leader Nick Clegg will unveil a change to his tax plans - a refinement of his promise of tax cuts for the poor paid for by the rich, designed to appeal to soft Tories who like the idea of tax cuts and soft Labour voters who believe that their party is too timid when it comes to taking on the wealthy.

Yes, sorry, I did mention the election. Though likely to be more than a year away, it is already defining how our politicians act each and every day.

Remember this, though. It's not so long ago that some believed that a successful G20 and the Budget would be a launchpad for an early election. If you still believe that, you really do need a holiday.

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Though merely a humble witness to the saving of the world and the turning of the page and the creation of a new world order, I do now feel in need of a lie down - so I'm off on my hols and back after Easter.

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The Chancellor of the World Exchequer. That is how Gordon Brown appeared today as he delivered his global budget speech at the end of .

It all felt so very familiar - and yet at the same time so very different.

There was the traditional Brown announcement of a nice round headline-chasing figure - a trillion dollars of funds to underwrite exports and for the IMF to support struggling economies.

There was an attempt to glide over the fact that the countries here did not agree to spend more - or indeed to borrow more - to fund another fiscal stimulus, though they certainly didn't rule it out.

And, as so often when Mr Brown was chancellor, the much-touted row with France never actually materialised.

The cheerleaders for this budget speech were, though, not Labour backbenchers but world leaders. They have been full of praise for the prime minister - not least the man who's still the most popular politician in the world: President Obama.

That will do Gordon Brown's political standing at home no harm at all.

However, with this budget - like them all - it's best not to judge on the day and better to wait a while and see how good it looks then.

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Will Gordon Brown be the trillion dollar man? He certainly hopes so.

Long before this G20 summit began, he and Barack Obama lost the argument about the need for world leaders to commit to spend - and, if necessary, to borrow - more to fund another fiscal stimulus.

However, the prime minister hopes to be able to announce a package of other measures - trade finance, IMF loans and increased liquidity - which adds up to a nice fat sum big enough to appeal to headline writers and, they hope, to boost the confidence of the financial markets and consumers around the world.

Already, the sums being talked of are:

• Increased IMF funds - $500bn
• Increased IMF Special Drawing Rights - $250bn
• New Trade Finance package - more than $200bn

Only $50bn needed to reach the magic figure of a trillion. Not much between G20 friends. Is it?

Update 14:23: He's done it.

Gordon Brown has got his trillion.

Remember, of course, that this is not a trillion dollars spent now. It is a pledge to make funds available up to that level if countries can convince international institutions that they have met the necessary criteria.

It has nothing to do with the argument about whether our government, or indeed, any other should spend or borrow more.

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The prime minister's always blamed America for this economic crisis. The French and the Germans have blamed Britain and America. "Who's right?" I asked at this morning's Brown/Obama news conference.

Their answers were instructive. Obama accepted that America had to take its share of the blame but then sought to share it with Britain and Europe:

"If you look at the sources of this crisis, the US certainly has some accounting to do with respect of a regulatory system that was inadequate to the massive changes that had taken place in the global financial system," he said.

"What is also true is that here in Great Britain, and continental Europe, around the world, we are seeing the same mismatch between the regulatory regimes that were in place and the highly integrated global capital markets that had emerged."

Gordon Brown retreated behind his new formula of "global problems require global solutions".

Aware of , he went on to joke that he was confident that President Sarkozy would be in his place for the last - as well as the first - course of tonight's pre-summit dinner.

Both men sought to play down talk of a rift, with Obama mocking journalists for being bored by pictures of heads of state and communiqués and wanting to inject some "controversy and drama".

So, now it's over to Merkel and Sarkozy to sound conciliatory or, well, inject some controversy and drama.

PS. Think back a few months ago. There were questions then about whether President Obama would come to the G20 at all, questions about who would visit the White House first, questions about which country he'd visit first.

The answer to every question was answered in the way Gordon Brown wanted. Today both men - dressed in blue suits, white shirts and blue ties - lavished praise on each other. Obama even offered him electoral advice to do the right thing. The prime minister could not have asked for more.

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It's familiar. It's as it's always been. It's almost reassuring.

Today the leaders of Britain and America stand shoulder to shoulder in the face of an economic threat. Hours later, the leaders of France and Germany will stand together too. Europe versus the Anglo-Saxons once again.

This divide matters because France and Germany blame Britain and America for the world's economic woes. They argue that the under-regulated brash excesses of New York and London caused all the problems. Their underlying message at this summit is: we told you so. We need to ensure that this doesn't happen again.

That is the fascinating thing about this summit. The leaders here understand the need to be seen to stand together but they're here too, as of course they should be, to fight their own countries' corner.

And remember, these four veterans of the old world are far from the only players at this summit.

What will really matter is what's heard from China, from India, from Saudi Arabia et al. It's going to be quite a two days.

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