To the din of his own party's infighting, Brown puts the Tories back on the defensive

It is starting to make the Labour Party of the early 1980s seem like a well-oiled and disciplined machine
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We have been here before. Gordon Brown plans to spend quite a lot more money on public services. The Conservatives claim they would spend a lot less, but that services would improve. This was the main dividing line at the last election. It will be so again at the next one.

We have been here before. Gordon Brown plans to spend quite a lot more money on public services. The Conservatives claim they would spend a lot less, but that services would improve. This was the main dividing line at the last election. It will be so again at the next one.

What was different about yesterday's statement was the noisy din that preceded it. Behind the scenes over the weekend, Blairites were attacking Brownites who were assiduously mounting counter-attacks on Blairites. Would Blair quit? Did he ever contemplate quitting? Would Brown succeed before the election? I am amazed that any of them had the time to contemplate any spending plans at all.

The collapse in discipline at the top of the Government is astonishing. Not so long ago, New Labour had a reputation of being too disciplined. It decided on a message relating to a policy announcement and stuck to it even if the new policy was tiny. I recall the starkly focused political mood on the eve of previous spending announcements. Behind the scenes and in public, ministers and advisers spoke in an almost tedious unity. Yes, we will invest in public services. Yes, we will be prudent, too. There are tough choices, but not so tough that there cannot be any good news. Thank you and good night.

Over the last few days, the messages have been comically different, as if a different, more anarchic government had taken over. For onlookers, it has been the equivalent of watching an elegant French film in the afternoon, every frame carefully choreographed, and then moving on to a Brian Rix farce in the evening. On the eve of yesterday's announcement, the messages were along these lines: Brown's people are trying to destabilise us, but the bastards won't succeed; it's Mandelson again going around spreading poison; it's John Reid going over the top; no, it's not Reid, it's Tessa Jowell.

A story on the BBC provoked the latestextraordinary battle of briefings. Bizarrely, I suspect that nearly all those accused by either side of being behind the story were entirely innocent. The BBC reported that Blair was contemplating resignation and several Cabinet ministers went to see him to persuade him to stay. Whether the story was new, old, accurate, inaccurate, or a conflation of several different, partially accurate stories, there is no doubt that a sensible government would have loftily dismissed it.

This Government has ceased to be sensible. It has become silly. Suspicion has reached such levels that a single story can provoke mayhem. Blair wants to keep his job. Brown would like to have it before the election. A journalistic pebble in the pond leads to fresh waves of infighting.

When the Government had few substantial policies to implement early in the first term, it was ruthlessly brilliant at presenting them in the media. Now it is following a more substantial agenda, the internal feuding threatens to divert attention from the policies. It is starting to make the Labour Party of the early 1980s seem like a well-oiled and disciplined machine.

The plotters get away with it because of the broader political picture. In policy terms, the Government holds most of the cards as Brown demonstrated yesterday. The Chancellor's most significant achievement has been to find substantial increases in cash for the public services without damaging the economy. The combination gives the Conservatives little political space, enabling Blair and Brown to reverse the old tax and spend debate.

In the 1980s, Labour was in a neurotic dilemma about how to counter the tax cuts introduced by the Conservative government. Now the Conservatives agonise over the spending increases proposed by Brown. In a significant intervention, the Conservatives' International Development spokesman, John Bercow, went public this weekend, calling on his party to match Labour's spending commitment on overseas aid. Some of Bercow's colleagues also want to pledge more money. Brown especially enjoyed himself yesterday when portraying the Conservatives as the party that is soft on defence and crime.

He will enjoy himself less when reflecting on a different question to the one posed by the Conservatives. The Tories ask him whether he is spending far too much. That is the relatively easy one to answer. The more relevant question is whether he is planning to spend enough. Over the next two years, the increases are fairly generous, but after that they get tighter. As he stated yesterday, Brown is seeking to revive public services that have been in decline for decades. Now that ministers are placing such emphasis on choice, he will be under pressure to provide more cash. Choice is meaningless without surplus capacity. This is an extraordinarily challenging leap at a time when voters' expectations have been raised considerably.

Yet Brown has probably concluded that it is politically impossible to contemplate further tax rises. When I asked Ed Balls, his former chief adviser, about increases in taxation in yesterday's Independent, he referred to the past, citing with some pride the increase in National Insurance announced in 2002. I sense that this is how far they will dare to go in the foreseeable future. The improvements in public services will only continue if the economy expands, and the savings in the Civil Service prove to be as great as Brown hopes. There are many ministers who have their doubts about whether the efficiency savings will yield the savings Brown suggests. New Labour has never fully escaped from its own tax and spend dilemma. It seeks incomparably better public services with relatively low levels of tax.

Even so, this is a more credible position than the Conservatives. It is the failure of the Conservatives to make more electoral headway that is the most important element in the current febrile political situation. While the Conservatives struggle to make an impact, Blair can work on the relatively safe assumption that he will win a third term. This is his protective shield as he awaits the Butler report tomorrow, and the outcome of the by-elections on Thursday.

Last Sunday's excellent Panorama programme was damning, contrasting the tentative nature of the intelligence on Iraq with Blair's certainty that Saddam possessed weapons of mass destruction. He has many questions to answer tomorrow, and he needs to answer them more substantially than by posing the question: "What would you have done if you had received this intelligence?" The answer to that was the one given at the time. Many others would have tested the accuracy of the intelligence before going to war.

But Blair will be responding to the Butler report facing a weak political opposition that supported the conflict. This is the context that transforms everything, the feuding, the debate over public services and the war. More precisely, the unresolved tensions within the Conservative Party over spending and tax levels will help Brown to win the debate over economic policy. They also make it a little easier for Blair to stay put in Downing Street amid the storms and the outbreaks of silliness.