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Budget 2001 Wednesday, 7 March, 2001, 18:27 GMT
Brown's balancing act
Chancellor Gordon Brown and Prime Minister Tony Blair
Brown aimed to hand Blair the next election
By BBC News Online's political correspondent Nick Assinder

Chancellor Gordon Brown told voters he wasn't going to indulge in a pre-election budget giveaway.

And, on the face of it, his fifth budget appeared to live up to that pledge.

He refused to be pushed into cutting the basic rate of income tax and gave another one of his speeches peppered with talk of prudence and caution.

But underneath, there was a 2bn spending giveaway which he clearly believes will hand Labour victory at the next election, still expected on 3 May.

He had around 4bn to splash about and, true to his pre-budget rhetoric, he targeted it on pensioners, the worst off and "hard-working" families.

Much of the package had, in true New Labour style, been comprehensively leaked beforehand.

So announcements on extending the lower, 10p, rate of income tax - whilst welcome by traditional Labour supporters - came as no surprise.

Chancellor Gordon Brown
Brown delighted his backbenchers
Boosts to pensioners' income were also massively leaked or pre-promised so, once again, the chancellor is unlikely to gain credit from his announcements in those areas.

Damp squib

Even the so-called feelgood policies - such as the benefits for families, and mothers in particular - had been so heavily predicted that, when the announcements came, many were left underwhelmed.

There were even complaints from some pensioners' organisations that the chancellor had failed to give them the big increases they had been hyped up to expect.

Indeed, so much of the Budget was already known that many believed the entire announcement was a bit of a damp squib.

But then came the rabbits out of the hat. First off, the chancellor resorted to all the old standbys of refusing to hammer drinkers and smokers.

But, more importantly, he remained true to all the Labour rhetoric since the last election by announcing a 2bn investment in health and education.

Even that saw him once again accused of double counting so that the real annual increase in spending amounts only to 600,000.

But many were claiming that he had managed to pull of the difficult balancing trick of satisfying the City whilst, at the same time, sweetening voters with election winning tax cuts.

Mr Brown was clearly desperate not to deliver any package that could undermine a second Labour administration which he probably believes is a near-certainty.

His first priority was to deliver that election-winning package of tax cuts and spending while also ensuring his chickens would not come home to roost after the next election.

Consummate package

Most Labour backbenchers were delighted with his Budget, believing that whilst it may have lacked some of initial pizzazz of previous announcements, it had offered real advances to ordinary families while still reassuring middle England.

But, as is always the case with Brown budgets, much of the detail of his announcement will only become clear over the coming weeks.

That is partly due to New Labour's irrepressible desire to announce everything twice - or three times if they can get away with it - but also because the chancellor is eager to seize the best possible headlines on day one.

And while most of his colleagues were congratulating him on another consummate package, the opposition parties lost no time in claiming he was still a high-taxing chancellor.

The proof of this particular pudding, however, will come through the ballot box.

With the general election expected in just a few weeks time, this was always likely to be the government's big moment - the time they could finally win back disillusioned heartland voters while once again appealing to middle England.

On the face of it, the chancellor has done his best to balance those two, often competing interests.

If he has succeeded he will be credited more than anyone else as the man who won Tony Blair his second historic election victory.


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