April was not the cruellest month for George Osborne; in fact, it wasn't too bad at all.

The Chancellor makes ready for still another "emergency" Budget today in the knowledge that 2014-15 ended with a 2.7 per cent average increase in tax receipts.

Better still, from his point of view, Mr Osborne is chipping the political ground from beneath his official opponents faster than he is chipping at the deficit. The national debt continues to grow, but Labour goes on yielding to the brutalism the Chancellor knows as fiscal conservatism. This is as perverse as it sounds. It is also at the very heart of Labour's decay.

Having promised to eradicate the United Kingdom's structural deficit by now, Mr Osborne borrowed £87.7 billion in the tax year just ended. A "public sector net debt" that stood in the region of £600bn in 2008 now tops £1.48 trillion. The Conservatives - with plenty of Liberal Democrat help - spent five years calling this consequence of the banking debacle "Labour's mess". Thanks to Labour, they got away with it.

Mr Osborne is pleased with that, no doubt, but not yet content. Whatever his Budget contains, he intends to bring forward a law that will oblige him - and in theory his successors - always to run a surplus during what the Chancellor terms "normal times". Labour can spot the crude trap. Yet, as with the demonstrable lie of the great unholy mess, the party seems intent on surrendering to its Tory-ordained fate.

What are normal times, exactly? Mr Osborne hasn't said. Why would he want a law to hold him to the task of eradicating the deficit when he is promising to achieve that very thing (at the second attempt) by 2018-19? Why make a shibboleth out of a surplus when interest rates are at historically low levels and the country cries out for investment? It's daft, yet Liz Kendall, one Labour leadership candidate, has "no problem" with the notion.

Mr Osborne enjoys a bit of political theatre, and he enjoys his Budget theatricals most of all. What with his self-declared emergencies, he has enjoyed more days before the Commons footlights than most of his predecessors. In the process, given his addiction to leaking all his supposed secrets ahead of the event, he has done more than any of them to destroy the old Budget conventions. He seems to regard the fact as incidental.

Patently, the Chancellor's real purpose is to set the agenda for debate for the foreseeable future, to force Labour on to his ground and make his opponents talk about the economy on his terms. A leaderless party seems only too happy to oblige. So the argument ceases to be about the principle of benefit cuts and becomes an argument over their extent. So Labour ceases to call for a 50p income tax rate and struggles to fend off Tory demands for a cut to the 45p rate.

You could say that is the fate of any Westminster Opposition. But Labour, still desperate to prove it can be trusted with the economy - once again surrendering to the "mess" lie - is more abject than most. Mr Osborne marches on. For him, each Labour retreat is simply a fresh opportunity.

Did the Tory manifesto say he would cut an arbitrary household benefits cap from £26,000 to £23,000? The Chancellor fancies doing more. The Treasury leaks say the figure to be set for families living outside London could go as low as £20,000. Will Labour object? There is no sign of that.

This time, Mr Osborne's chosen venue is the theatre of cruelty. Even as he "indicates" that those owning £1 million houses will be safe from the terror of inheritance tax, the Chancellor sets out to punish ordinary families with, as he would have it, too many children. The cap is the crudest implement imaginable. It ignores why anyone would need a particular form of aid - for children, for housing - and simply seizes on a benchmark median wage (for an individual) of £26,000.

Need has nothing to do with this. The principle of the cap itself is irrational, even - especially - if you believe the Chancellor when he claims to be preserving a safety net. It is one thing for Labour to accept that the overall benefits budget is an issue; quite another for the party to yield over this specific piece of one-cap-for-all nonsense.

But yield it does. Harriet Harman, Labour's acting leader, said in her response to the Queen's Speech that the party was "sympathetic" to a cut in the cap from £26,000 to £23,000. Why then, on principle, would she demur if Mr Osborne decides to slice a little more? The £23,000 figure takes no account of individual family needs. If that human reality is discarded, why would Labour quibble over £20,000?

It accepted the first version of the cap, after all, when three years ago £26,000 was deemed an acceptable limit. Does it think no family in need of benefits notices the loss of £3,000? Does a £6,000 cut pass muster just because opinion polls say the public likes this sort of thing and thinks Labour is too soft? Fine by Mr Osborne. He can proceed, unchallenged, to his next target in his effort to identify £12 billion in "savings".

He says now that he knows where those will come from. Cleverly, according to admirers, he has stuck the BBC with the £750 million cost of TV licences for the over 75s. Judging by the leaks, he will also cut benefits for "high earners" in social housing and, above all, assault child and working tax credits. The last of these, most heinous of all, most foolish of all, is Mr Osborne's big ticket item.

The Social Mobility and Child Poverty Commission believes any cut to credits will reduce the incomes of 45 per cent of working families. The number of children likely to be affected is put at 7.5 million. The Chancellor will know all of this, given that the commission advises the Government, but he maintains that credits are "very, very expensive". He also accepts that the taxpayer is subsidising low pay.

That's not seriously in doubt. There's not much doubt, equally, that Mr Osborne would never dream of imposing himself on the labour market by addressing the issue of poverty wages, even as he cuts the credits keeping families afloat. If Labour cannot hinder the Chancellor in his shabby plans, therefore, what alternatives does it offer?

Chris Leslie, the shadow Chancellor, has recognised the importance of credits, but his response to the Osborne assault has been symptomatic of a party trapped within Conservative logic. Mr Leslie's big idea is tax breaks for employers prepared to pay the Living Wage. In other words, he would replace on subsidy with another. Apparently there is no such thing as a scrounging low-pay employer.

Mr Osborne will rise to his feet in the Commons today with the confidence of a man who knows he has won even before he begins to speak. You can hardly blame him. He still does Tory politics better than Labour. Meanwhile, that astounding national debt goes on rising.