Brown heads off winter of discontent

Brown delighted Labour MPs

By BBC News Online's political correspondent Nick Assinder

Chancellor Gordon Brown has delivered the speech of his career with a pre-budget programme aimed at heading off a new winter of discontent.

In a carefully-crafted pre-Budget statement he attempted to pacify fuel tax protesters, pensioners and tax payers.

He stood firm against demands for massive across-the-board cuts on petrol duty, and he rejected calls for the state pension to be linked to average earnings.

But, at the same time, he managed to offer enough concessions to the competing groups to avert a major conflict later this month which could see a renewal of petrol blockades and pensioner demonstrations.

He knew he had to do something special to balance all the competing interests and dig the government out of its biggest post-election hole.

He was also painfully aware that, for the first time since the last election, his image as the most unassailable man in government was under attack.

If he had failed to deliver he would have fatally damaged his own standing and - more importantly - undermined the government's chances of a second term.

Huge concessions

But the overwhelming verdict after his Commons statement was that he had managed to pull it off.

In a complex and, at some times confusing statement, he appeared to stand firm in the face of all the threats from hauliers and pensioners.

But, at the same time, he offered huge concessions to both groups.

In a move heavily leaked to the media, he froze petrol taxes and targeted future cuts on green fuels.

He refused to restore the link between pensions and average earnings, but also delivered a series of measures that, he claimed, would give pensioners more cash than restoring the link.

Labour MPs were delighted by his announcement which, they believed, addressed all the key problems which have recently beset the government.

And they claimed he had put Tony Blair firmly on track for a second election victory.

Opposition MPs immediately dismissed his statement as blatant electioneering and claimed that, once the figures were analysed, his package would dramatically unravel.

And there was some initial scepticism from pensioners and fuel protesters who claimed they were being blinded by statistics.

Ultimately, this will be the great test of Mr Brown's package.

No one doubts that he has the skill to deliver eye-catching, and even election-winning, proposals.

But there have been growing concerns that he has previously dressed up unpalatable policies in populist clothes.

That will not work this time. If pensioners and fuel protesters are not pacified by his package the government will find itself back in the mess it experienced last month.

And that would prove disastrous not just for Tony Blair, but for the man who has previously been seen as the government's saviour.