Launchpad for the election

Brown has the task of delivering the next election for Labour

By BBC News Online political correspondent Nick Assinder

When Gordon Brown addressed Labour's conference in Glasgow last month he warned voters not to expect any pre-election giveaways in his coming Budget.

Eager to maintain his image as the super-prudent iron chancellor, he insisted he had not imposed four years of unpopular austerity just to throw it all away in an opportunistic splurge of spending.

He came as close any politician ever does nowadays to declaring: "Read my lips."

When he delivers what looks to be his most important budget yet on 7 March, as he told Labour members at the conference: "There will be no return to the irresponsible pre-election giveaways of the past."

In other words, the government has no plans to follow the disastrous path of previous Labour administrations and embark on a spending spree that ends in economic crisis and enforced cuts.

They were tough words and went down well with the conference but, as usual with the chancellor, there was another message.

Brown has plenty to smile about

He certainly does intend to use his massive surplus - currently running at somewhere around £40bn - to boost spending and cut taxes, but in clearly defined areas.

He told the conference there would be "responsible tax cuts where affordable, for families, pensioners, savings and investment".

Full employment

And he went on to set out what many saw as a personal manifesto far more radical from the one they have come to expect from the prime minister.

He insisted he was out to create full employment by matching people's skills to available jobs, and to halve child poverty by 2010 and eliminate it within a generation.

Families will be at heart of budget

So there will be tax cuts, and there will be spending over and above the previous announcements on things like fuel duty and the basic state pension.

But what the chancellor is desperate to do is maintain his prudent image, in order not to frighten Middle England or the City, while at the same time appealing to traditional Labour voters with a reforming, redistributive package.

And, of course, one thing Mr Brown loves more than anything else, is to spring a few surprises - and this Budget will be no exception.

His comments at the conference were a deliberate attempt to lower expectations so that his announcement has greater impact on the day.

Clearly pensioners - still smarting from their 75p-a-week increase last year - families with children and investors will be big winners from this budget.

Huge gamble

Pensioners will get big boost

But the chancellor will also want to do something to put a smile on just about everybody's face in the run up to the election, still expected on 3 May.

So there will be a huge temptation to offer a cut in the basic rate of income tax, currently at 22p in the pound.

Analysts believe he could use between £3bn and £4bn for tax cuts, easily enough to help the groups he has already targeted with plenty left over to offer a reduction in the basic rate.

But this would be a huge gamble and while it may win Labour support in the polling booths, it could come back to haunt him in a second term through rising inflation.

And it is clear that Mr Brown is working on the basis that Labour will win that second term and he is not about to do anything that might rebound on him during that period.

The chancellor has always been one to play things long and he has emerged as one of the most successful ministers in the New Labour government - many even cast him as one of the most successful post-war chancellors.

And he will want to emerge from the Budget as the man who won Labour that historic second term and secured his standing as the leader-in-waiting.