Andrew Grice: The Week in Politics

Brown and Cameron clash - when will phoney war end?
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When Gordon Brown unveils his 10th Budget on Wednesday, the question on everyone's mind will be: will it be his last? In other words: will he be Prime Minister as a new Chancellor - probably Alistair Darling - is delivering his first Budget in a year's time?

Mr Brown is not counting his spring chickens yet. He has stood on the threshold of 10 Downing Street for so long, and yet the polished black door remains frustratingly closed in his face. "We have had a lot of last Budgets," one Brownite quipped.

Wednesday's Budget will be different because Mr Brown will go head-to-head for the first time with David Cameron, the Tory leader, giving us a preview of the nation's choice at the next general election.

The Chancellor will be anxious to redraw the dividing lines between Labour and the Tories that Mr Cameron deliberately and successfully blurred as he moved his party back to the centre ground. The lines were almost invisible this week, when Tony Blair had to rely on the Conservative Opposition to defeat a rebellion by 52 Labour MPs over his school reforms.

Maintaining such dividing lines has always been at the core of Mr Brown's political strategy. It has served Labour well at the previous three elections. But Mr Cameron's strong start as Tory leader means the boundaries must be redefined, Mr Brown judges.

He does not want Mr Cameron to embrace his Budget. He would prefer the Tories to vote against the Finance Bill that will implement it. He suspects the Tories would rather like to support it, while saying how they would tackle issues they accuse Labour of flunking.

The Tory leader may welcome measures to improve social justice and help working women, saying they are in line with his new-model, "compassionate Conservatism". So we should expect the Chancellor to accompany the cuddly stuff with some medicine the Tories will find so difficult to swallow that they can't vote for his Budget. For example, the Opposition has long called for the scrapping of the New Deal for the jobless and would find it hard to support an extension of it, even when unemployment is rising.

The symbolism of the Brown v Cameron clash will inevitably raise the question of when their phoney war will end and the real battle will begin. For Mr Brown, it can't happen a moment too soon. After a miserable week for Mr Blair, an increasing number of Labour MPs agree.

At his press conference on Thursday, Mr Blair squirmed under a barrage of questions about Labour's multimillion- pound loans from businessmen he had nominated for peerages, which he kept secret from the party treasurer, Jack Dromey, and the independent Lords Appointments Commission.

The stench from the "peerages-for-cash" affair, following hard on the unfinished Tessa Jowell saga, contributes to a picture of an administration which has lost its way. Add the dependence on the Tory Opposition to pass Mr Blair's school reforms and redundancies in the National Health Service, despite the billions pumped in, and it makes a pretty toxic brew.

Significantly, Mr Blair addressed the "dividing lines" issue in a speech in Sedgefield on Thursday, which was eclipsed by the funding row. Rather optimistically, he set out plans for him to put his stamp on Labour's policies for the next 10 years before he departs. It seemed ambitious given the speculation that he might not be Prime Minister in 10 months. As he may remind us in the Budget, Mr Brown holds the whip hand over Labour's long-term strategy. The framework will be a root and branch review of all government spending next year. The author? G Brown, of course.

Mr Blair is starting to pay the price for his surprise decision to announce in October 2004 that he would not seek a fourth term. Mr Blair always knew there would be a downside. Many of his closest allies begged him not to do it.

Yet he still thinks he did the right thing. At the time, he believed Mr Brown was shaking the tree in the hope that Mr Blair would fall off his perch. He didn't want the 2005 election dominated by whether he would "go on and on", as Margaret Thatcher once promised. He needed his Chancellor's support at the election and during his third and final term.

Since the election, the two men have been, in the words of one insider, "muddling through". The strains underlying their better working relationship were shown by the sniping between their camps after Blairites claimed Mr Dromey was working on Mr Brown's behalf to destabilise the Prime Minister.

"It's not perfect, but it's better than the alternative," is the Blair camp's view of the two men's attempt to achieve a "stable and orderly transition" that would protect both Mr Blair's legacy and Mr Brown's inheritance. "We are in uncharted waters - it's never been done before," said a close Blair ally.

Bill Emmott, outgoing editor of The Economist, yesterday went out with a bang, urging Mr Blair to "quit while he is still ahead". He doubted that Mr Blair would be able to drive through his health and other reforms over the next two years.

Mr Blair does not intend this Budget to be Mr Brown's last. I suspect he would like the Chancellor to deliver one more before moving next door. Yet Mr Blair's troubled week reminds us just how hard it will be for him to go out on a high. He will have to defy the laws of political gravity to disprove Enoch Powell's dictum that "all political careers end in failure".