Jeremy Warner: This was one of Brown's cleverest budgets yet

Traditionally, Labour loses elections because it messes up the economy. There was little sign of that happening in yesterday's Budget, which more than confirms the Chancellor's position as far and away the most competent member of the Government.

Traditionally, Labour loses elections because it messes up the economy. There was little sign of that happening in yesterday's Budget, which more than confirms the Chancellor's position as far and away the most competent member of the Government.

While the Prime Minister flails around with top-up fees, Iraq, constitutional reform and the rest, the Chancellor has been quietly shoring up Labour's electoral prospects with a case study of almost textbook perfection in successful, macro-economic management.

Michael Howard, leader of the Opposition, tried his damnedest, but not even his formidable debating skills could land a meaningful punch on a Chancellor now so wholly confident in his place in history that it's hard to imagine the Treasury without him.

If everything was going so well, Mr Howard protested, then why did the Government need to keep borrowing so much to keep the show on the road? This was a credit card Chancellor, he thundered, echoing the suspicion that the whole nation is progressively sinking beneath a sea of debt.

The problem Mr Howard has got is that most people care as little about black holes in the public finances, cyclical budget deficits and whether the Chancellor's numbers are likely to add up as they do their own burgeoning credit card bills.

Come the election they will instead focus on current economic performance, which as the Chancellor pointed out, is showing the longest period of uninterrupted growth since the start of the industrial revolution. They will also focus on the present happy coincidence of rising living standards and near full employment.

Mr Howard stands shoulder to shoulder with a number of respected outside forecasters in believing the Chancellor will have to raise taxes soon after the next election to stay within his own fiscal rules. They may be right, but the rules were designed to be flexible, and the truth of the matter is that even if things don't go quite as the Chancellor plans, the public finances in Britain will continue to look so much better than almost every other G7 economy that it hardly seems worth worrying about.

Yesterday's Budget was politically one of the cleverest we've yet seen from Gordon Brown. Strong economic growth enables the Government to promise real increases in spending on health, education, defence, the home office, science and local authorities, while at the same time credibly claiming that mainstream tax rates won't have to rise to pay for them.

The trick is achieved by stealing the Tories' clothes on the scope for cost cutting in government. Some 54,000 civil service jobs are to go so as to create more money for spending on front-line services. In this way, the Chancellor is able to limit the growth in overall spending to just 2.5 per cent a year but promise much greater increases for health, education and the rest.

At this stage, it is impossible to know whether any of it will work. The Chancellor has again been vindicated on his economic forecasts, but he has been badly wrong on his estimates of the fiscal deficit, which he had to increase by £10bn for this year in the Pre-Budget Report. Yesterday's Budget further increases the forecast deficit, but by only £3.4bn over the next five years, which makes no odds.

Many would say that this number too is largely fantasy, but with a fair wind, and if the Whitehall cuts prove as easy to make as the Chancellor imagines, there's no reason the Government shouldn't make it. Mr Howard's best shot at the Chancellor, which is that taxes may have to rise after the next election, hardly looks at this stage as if it will produce a Spanish-style upset at the polls.

Yet there is still plenty the Government needs to worry about in its economic policy making. The Chancellor has resisted the temptation to impose any obvious and substantial extra burden of taxation on business, but as is his wont, there's a legion of itsy bitsy little measures buried in the Budget documentation which collectively add up to quite a lot and for many smaller businesses will be a source of intense irritation.

For instance, the Chancellor has bizarrely decided to impose stamp duty on properties owned by business partnerships. Even for larger partnerships this will be an administrative nightmare, but for smaller partnerships, say a family-owned greengrocer, it will also have obviously painful financial consequences.

The Chancellor promises a war on red tape, yet for whatever progress he makes in untangling what's already there, he seems to tie business up with a whole lot more. All over the place, the Government is piling more regulation onto business.

Witness the ridiculous amendment to the Planning and Compulsory Purchase Bill that would allow local authorities retrospectively to ban the use of mezzanine floors in retail premises, which ministers are thinking of backing. This from a Government which says it will change the planning laws so as to allow for the construction of more housing.

Forget the public finances, which are better managed now than they have ever been, it is the Government's apparent obsession with meddlesome regulation which presents the greatest threat to Britain's economic well-being. The growing complexity of the tax system further gums up productive business with tedious, resource-intensive administration, undermining the Chancellor's aim of a thriving enterprise culture.

Nor was there anything in this Budget to address the growing crisis in the savings market, where again the Government's obsession with regulating the industry rather than encouraging people to save is in danger of producing calamity.

Unfortunately for Mr Howard, all these things are on a long fuse, and for him the uncomfortable truth is that the Chancellor is still a long way from being booed off stage.