Budget 1999: Red Gordon and the Iron Chancellor sit happily together

"REDISTRIBUTION BY stealth" is a phrase that entered the Treasury lexicon in the run-up to the Budget. Although the slogan was not intended for public use, it will enter the political bloodstream.

Such talk does not go down well in Tony Blair's inner circle, which would prefer that Gordon Brown stuck to his City image as the "Iron Chancellor" rather than playing his role as "Red Gordon" in front of the Labour Party gallery.

Yesterday's Mr Brown sought to play both parts at once but Mr Blair was happy enough. He calculated that next year's surprise 1p off the basic rate of tax, plus the 10p bottom rate, which starts next month, would be the best antidote to the Tory attack on Labour's "stealth taxes".

William Hague is convinced the voters will rumble the Chancellor once the initial gloss of yesterday's package wears off. But Mr Brown and Mr Blair believe their trump is that the pain they inflict on the well-off will be alleviated by falling interest rates, which have saved the homeowner pounds 900 a year on average mortgage payments.

Mr Blair paid a generous tribute when the Cabinet was given a preview of the Budget, describing it as "radical and imaginative". Indeed, Mr Blair believes Mr Brown has not got full credit for his stewardship of the economy. Mr Blair thinks the Chancellor has laid such firm foundations that it will be be difficult for the Tories to dent Labour's reputation for economic competence before the next general election.

The ecstatic reception from Labour MPs last night will also have cheered Mr Brown.

"Gordon wants to get the credit with the Labour Party because he is still desperate to be leader," one minister close to Mr Blair said.

Mr Brown is probably the most powerful Chancellor we have had for a long time, yet even his friends admit he can seem remarkably insecure.

His enemies attribute this to his thwarted ambition in 1994, when John Smith died and Mr Blair, the junior partner in the Brown-Blair axis, inherited the crown.

The Chancellor is stubborn. He does not like to change course, or admit he has been proved wrong. He ploughed on with his working families tax credit - even when alarm bells rang in 10 Downing Street about the cost.

Mr Brown saw no need for last month's high-profile statement by Mr Blair unveiling the national changeover plan to prepare Britain for the single currency. The two men have reversed roles on the euro; Mr Brown used to be more gung-ho, and Mr Blair more cautious. "He just wants to get on with running the economy now; the euro is a bit of a distraction," said one Labour ally.

Mr Brown has had an unhappy few months. The death of his father, which hit him hard, was followed quickly over Christmas by the resignation of two of his inner circle, the Treasury minister Geoffrey Robinson and Charlie Whelan, his press secretary, in the crisis which also claimed the scalp of Peter Mandelson, a friend turned foe of Mr Brown.

But allies insist the Chancellor has recovered from the setbacks, and that his girlfriend, Sarah Macauley, has been a "rock" during the troubled times. "He is relaxed and enjoying life again," said one ally on the Labour back benches.

Despite Mr Blair's praise, the tension between their camps remain barely beneath the surface. One Blairite said: "It was worth losing Peter Mandelson in order to get rid of Charlie Whelan, because Peter will come back and Charlie won't."

The Blairites sometimes wonder whether the Chancellor has a fatal flaw stemming from his haunting fear that he will miss out on becoming prime minister. Mr Brown's supporters believe yesterday's clever package will enhance his prospects of winning the big prize. And yet Mr Blair no longer believes it is inevitable that Mr Brown will be the man who succeeds him.

Start your day with The Independent, sign up for daily news emails
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific